Arkansas Homeowner’s Insurance
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UPDATED: Sep 24, 2020
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The average cost of an HO-2 insurance policy in Arkansas is $788, but your costs may be either higher or lower, depending on a number of factors regarding the home and your personal financial situation. An HO-2 policy protects the home and other structures against most perils, excluding only the ones that are named in the policy, usually things such as war, earthquakes and flooding. The policy includes coverage for the dwelling, other structures, and your personal property, as well as offering protection for a condition known as “loss of use.” Knowing what those types of coverage mean could be important if you have to file a claim.
This is the structure of the home. It includes the primary living area and any buildings which are attached to it, such as an attached garage. Dwelling coverage is the type of insurance the home owner carries on a house that is being rented or leased, while the tenant would be responsible for other coverages.
Any buildings or other structures that are not attached to the dwelling fall into this category. This might include a separate workshop, a pump house, and accessory buildings such as a boathouse. If your property has a fence around it, that fence would be covered under the “other structures” section of your insurance policy.
Personal property up a certain amount is covered on your home insurance. Everything listed in your home inventory is part of the personal property covered, but take note of the fact that only a specified value of personal property is included. If you need more coverage, and most people do, then you will either have to increase this portion of the policy or purchase a separate policy just for your personal effects.
Loss of Use
Loss of use means that you are not able to live in the home. This can be the result of either total or partial damage to the dwelling, but does not usually include the other structures. When you file a claim for loss of use, be prepared to present receipts for the hotel room or restaurant dining. Loss of use includes any costs associated with maintaining your pre-loss standard of living, not just the costs of food and lodging.
Average Arkansas Homeowner Insurance Rates vs. US
Cheaper Arkansas Home Insurance
Getting home insurance at the lowest price is not as difficult as you might think. Some simple tips that can save you money include bundling insurance, adjusting your deductibles and keeping your credit score up. There are many ways to save money, but you have to find out which ones will work for you.
Multiple Insurance Policies
Using the same insurance company for multiple policies or lines of insurance can save you money. On the surface, the discount is called a customer loyalty discount, but the statistics say that covering the same person on multiple policies reduces the risk of paying simultaneous claims, and the savings is passed back to you in a discount.
Increase your Deductibles
The more you are able to pay out-of-pocket, the lower your premiums will be. By accepting more of the risk on yourself, insurance companies reward you with a discount to reflect your contribution. Be careful not to set the deductibles higher than you can realistically afford or you could negatively affect getting a claim settled.
Monitor your Credit
Your credit score is the way an insurance company will evaluate your financial stability. Try not to let your credit score slip below 650, and remember that the higher it is, the less your insurance premiums will be. If you find errors on your credit report, get them corrected as quickly as possible and make sure that all major credit reporting agencies are notified.
Look for Discounts
You may qualify for discounts for a lot of reasons, and not all discounts are offered by all insurance companies. You can also get discounts for installing a security system or putting up a fence around the property. Finding the right discounts can balance the cost difference between a basic policy and having all the coverage you need.
Home Characteristics Affecting Arkansas Insurance Rates
Your premiums will be affected by characteristics of your home in different ways. Homes built in low-lying areas may be difficult to get traditional coverage for, and some locations may only be insurable through state-monitored insurance pools. The building materials in your home affect how durable the dwelling is, and wood is more risky to insure than stone or masonry. Insurance will also vary according to the size of the home, as most premiums are calculated to include a cost per square foot.
Defending Your Home Against Crime & Vandalism
Insurance alone cannot protect your home against burglary and vandalism. The burglary rate alone is 11.15 per 1000 people and that is more than double the national rate of 5.17. Some of this crime can be avoided by installing area lighting and other security devices. Even a fence around the property will reduce the risk of mischievous activity, but the best form of home security is an alarm system that is monitored 24/7 by an off-location company.
Local Natural Disasters Arkansas Homeowners Should Consider Protecting Against
Arkansas receives a mix of potentially catastrophic events every year. A standard home insurance policy is not usually sufficient to cover possible events like flooding or even movements in the earth.
Arkansas is ranked 12 out of 51. This means that the state does not experience earthquakes as regularly as some states, but the risk of earth movements do exist. Earthquakes are not typically included in a standard home insurance policy but you can buy earthquake insurance separately.
In 2009, Arkansas home owners filed 669 claims, which can be compared to 46,621 claimed nationwide. Floods can happen anywhere and are not included in any standard home insurance policy. In locations where the risk of flooding is especially high, flood insurance may not even be offered by traditional insurance companies, leaving homeowners to purchase higher-cost high-risk insurance from a state managed insurance pool.
Hail damage is included in a standard policy’s wind damage coverage. Be careful, though, that you have enough coverage and the right type. Some policies will only pay a cash value claim, while others will pay for full replacement cost. The second type costs a little more, but can save you thousands of dollars in the long run.
Wind and water damage are both included in a standard home insurance policy, but hurricanes are notorious for causing widespread flooding, and flood insurance is always purchased separately, no matter type of policy you buy. Flood damage can be so severe and widespread that insurance companies are not able to provide coverage for flooding without charging an additional premium.
With only 56 per year, Arkansas is a very low tornado risk compared to the 1,680 tornadoes that are experienced nationwide. Your home insurance policy probably includes tornadoes, and definitely includes wind damage, the primary type of tornado damage. Flooding is commonly associated with tornadoes as well, and is not included as part of your tornado coverage.
74,749 wildfires occur in our country every year. They can strike any area, and are more common in rural forested areas where the underbrush is not cleared out using controlled burning. Wildfires are covered in your home insurance policy, but make sure that your coverage is set up to fully replace your home if it is destroyed because many policies are not.
Arkansas Homeowners Insurance Optional Coverage
At the risk of sounding repetitive, flood insurance is important. Other optional coverage could be important, too, such as personal liability protection. This type of optional coverage pays for injuries that someone else suffers on your property, but it also prevents an injured person from suing you for the value of your home. Some personal liability insurance includes medical payments that provide income to the injured person if they are unable to work because of the accident. Liability insurance can be supplemented using an umbrella policy as well. This is not a rider, but a separate liability policy that will pay out on large claims against you after your existing liability limits are reached.
Important Contact Information
Arkansas Department of Insurance
1200 West Third Street
Little Rock, AR 72201
Phone: (501) 371-2600
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