You probably put a lot of thought into finding your piece of San Francisco real estate. Now you have to figure out the best home insurance options for you, your lifestyle, and your budget. Many different elements make up a good insurance policy. Here are five factors for you to consider when looking for home insurance in San Francisco.

1. Know the Real Value of Your Home to Know Its Replacement Cost

If your home suffers a total loss, do you know how much it would cost to rebuild it? The more expensive the replacement cost, the more expensive the insurance. If you don’t know the value of the home, you won’t know if you’re buying too much insurance or not.

A home’s replacement cost is not the same as its market value. The market value includes the structure and the rest of the property. Your insurance only covers the structure. So you’ll want to insure your home for the value of the structure itself.

There are several ways to come up with a home’s value.

Per square foot construction costs – Find the cost per-square-foot to build a home in your specific area. Multiply that amount by the area of the home. This will give you a replacement cost for the structure. You can find the per-square-foot amount online, with software, or by speaking to multiple local contractors. It’s always a good idea to check in with your local Realtor, as well. Realtors with local experience, especially in a complex and dynamic market like San Francisco’s, will help you put the numbers into perspective.

Look at the estimates from several insurance providers – Just by seeking estimates, you will start to get a good idea of what insurance companies consider your home’s total replacement cost. You can use that information to find an approximation of your home’s value.

Have an independent appraiser do the math – You can hire an independent appraiser to work on figuring out the value of your structure for you.

With the value of your structure in hand, you will know if the offered insurance policies are inflated, or actually provide the appropriate value.

2. Know What Kind of Insurance Agent You’re Dealing With

There are different types of insurance agents out there. Knowing which type you’re dealing with can make the difference in finding the right insurance for your particular needs.

Exclusive, direct writers, or captive agents

These terms all indicate an agent who works for a single insurance company. This type of insurance agent can only offer you that particular company’s options. They can only give you deals if their particular company has deals to offer.

These agents receive commission, and they have a vested interest in at least trying to sell you their most expensive packages. This isn’t to disparage such agents; after all, a large insurer isn’t necessarily a bad one. And you may find deals no other insurance company currently offers.

If you sign up directly from a company’s website, or you sign up through the mail, then you’re technically dealing directly with the insurance company itself. You will never see an agent in these cases. However, your account may still be assigned to a local “captive” agent.

Independent or insurance brokers

An independent agent or insurance broker can work with one or more insurance companies. These are individuals or privately owned companies. Where an exclusive agent represents the insurance company for you, the independent agent represents you to the insurance company.

Because they are free to work with multiple insurers, they can come up with unique packages you won’t find elsewhere. When dealing with brokers, you may have to pay broker fees. Depending on the types of packages they put together, you may find the fees well worth it.

3. Know What Your Policy Will and Won’t Cover

It’s easy to drown in all the options offered by insurance companies in San Francisco. But, what you really need to pay attention to is what the policy covers. Just as important, you should know exactly what the policy doesn’t cover.

When it comes to home insurance in San Francisco, the insurer only covers things it explicitly says it will cover. Also, look for exclusions, which are items the insurer explicitly will not cover. If the policy excludes something that you feel you should have, then you can likely add it on for extra money.

Basic coverage options

Generally, San Francisco home insurance policies will include separate parts which cover aspect of your property to a defined extent.

  • The dwelling
  • Other structures on the property
  • Your personal property
  • Loss of use of the dwelling
  • Personal liability
  • Medical coverage for others

You can set the dollar limits for these policies. You can also extend them or add additional types of coverage as well. The important part is that you know exactly what your policy covers. Each of the aforementioned categories comes with negotiable caveats that change the nature of the coverage.

Read the fine print

For example, the insurer covers the dwelling, but it only covers it against very specific types of damages. It almost certainly won’t cover a property for flood or earthquake damage without you paying to add those additional protections.

Consider your personal property. Your policy may specifically not cover items you own that exceed a certain dollar amount in value.

4. Know that Earthquake Insurance in San Francisco…Is Really Up to You

You may have heard you need earthquake insurance. You may have heard the opposite. In the end, do your own research and decide for yourself. Here are a few things to consider:

  • Insurance agents must suggest earthquake insurance, though the coverage isn’t mandatory.
  • Earthquake insurance may not cover anything if there’s no damage to the structure itself.
  • A seismic retrofit can mitigate a lot of the damage that would come from an earthquake.
  • Earthquake insurance may offer peace of mind, especially if you have a lot of equity in your home.
  • In some cases,the amount of the deductible for earthquake coverage can make it pointless to have for some homeowners.

There’s a multitude of pros and cons. So you will have to weigh the option carefully for yourself and with the help of trusted professional advisors.

5. Work with an Experienced San Francisco Real Estate Agent to Find the Best Home Insurance in San Francisco

One of the best things you can do is to work with a local real estate agent. They will know a lot more about how insurance and insurance claims realistically work in your area. They are familiar with:

  • The value of San Francisco real estate.
  • Reputable and high-quality insurance agents and companies.
  • The types of policies San Francisco homeowners often choose and why.

Experienced San Francisco real estate agents know how to help you choose the type of coverage you need for your specific home. If you’re buying or selling a home in San Francisco, please reach out to Danielle Lazier :: SFhotlist Team and Compass San Francisco!

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