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Illinois Homeowners Insurance

While Illinois homeowners insurance is not mandatory, lending companies may require that you purchase it before they will agree to a mortgage.  Homeowners insurance is also the easiest way to protect not only your IL home, but the personal effects that fill it.  When most people think about homeowners insurance they think about replacing their home or making repairs in the case of fire, flood, or other disaster.  However, homeowners insurance in Illinois protects more than that.

Basic Coverage Offered With Illinois Homeowners Insurance

  1. Property Coverage – Property coverage pays for physical damage to your home, personal property (up to 50% of what your home is insured for), and detached buildings such as a garage or shed in the event of things such as fire, windstorm and theft.

  2. Additional Living Expenses – These are the costs incurred if you are displaced from your home.  Your policy may help pay for food or a motel in the event that something happens where you can’t live in your house.

  3. Liability Coverage – This pays for bodily injury to another person or property damage that happens while someone is visiting your home that you are legally responsible for.  You can sometimes purchase additional insurance that will help cover legal fees.  Medical coverage only covers up to the limit you have purchased.  This means if you have only bought $5000 worth of coverage and medical bills exceed $5000 the difference comes out of your pocket.

What Isn’t Covered By Illinois Homeowners Insurance?

There are a number of items that Illinois homeowners insurance does not cover, but you can usually buy additional coverage for some of these exclusions.

  1. Policies do not cover damage that is caused by wear and tear, age, rotting, lack of upkeep (such as making routine repairs) or any damage that is done intentionally by the homeowner.

  2. Items such as cars, boats, jet skis, or snowmobiles that are more appropriately covered under another policy.

  3. Illinois homeowners insurance does not cover things of catastrophic nature such as earthquakes, floods, or acts of war.

  4. Illinois insurance companies are allowed do decide if they do not want to cover something because of the cost involved.  Two examples are injuries due to trampolines or animal attacks.

Additional Coverage For Your Illinois Homeowners Insurance Policy

  • Personal Property Replacement Cost – A standard Illinois homeowners insurance policy only covers replacement of personal effects up to half of the cost to replace your home.  If your home costs $100,000 your personal items will only be covered up to $50,000.  You may want to purchase additional insurance to cover personal items.

  • Building Guaranteed Replacement Cost – This is useful in the event you buy an older home.  It pays to rebuild your home at today’s costs even it is more than what your home is worth.

  • Refrigerated Products - Pays to replace items in your refrigerator or freezer.

  • Business Insurance – Provides limited coverage for business materials if you work from home.

  • Earthquake Insurance – Pays for damage caused by earthquake.

  • Inflation Guard – Automatically raises your coverage limits each year to account for inflation.

  • Mine Subsidence – Pays for damage when an underground mine collapses or shifts that causes damage to your home.  Insurance companies are required to offer mine subsidence insurance in areas where underground mines are common, such as central and southern Illinois.  You will have to sign a rejection waiver if you live in an area where mine subsidence insurance is required.

  • Scheduled Personal Property – This pays for damage to special items such as antiques, art, jewelry, coin collections or computers.

  • Sewer Backup and Sump Pump Overflow Endorsement – Pays for any damage to a finished basement in case of sewer back up or sump pump overflow.  In the event of an unfinished basement only limited items are covered.

  • Increased Limits on Money and Securities Endorsement – This increased the coverage on items such as money, deeds, and bank notes.

  • Watercraft Endorsement – Covers liability and medical payments for damage or injury caused by outboard motor boats and small sailboats.

  • Flood Insurance Coverage – Pays for damaged caused by flooding.  Mortgage lenders require flood insurance if you live in high risk flood areas.  You can also find coverage through the National Flood Insurance Program.

Information Needed To Get An Illinois Homeowners Insurance Quote

There is some general information that you will need in order to obtain a reliable quote as well as secure homeowners insurance in the state of Illinois.

  • Type Of Coverage – You will need to know what kind of coverage you want and how much.  Will standard coverage do or do need extras such as sewer backup coverage?  Working with an insurance agent is the best way to decide if you will need any extra coverage.

  • Description Of Your Home – This includes information such as when the house built, number of square feet, and number of floors.  Your coverage amount assumes replacement cost values with wood frame construction.

  • Location – your address.  Seems simple enough, but insurance rates can increase if you are in a high crime area, and by the distance you are from the nearest fire station or hydrant.

  • Fire And Security Devices – having smoke detectors and security devices installed in your home can reduce your premiums.

  • Loss History – how many claims have you had to file in the past?  This will also make a difference in your premiums.

How To Inventory Household Items In Case A Claim Needs To Be Filed

Having an up to date inventory on all household items will help you determine how much coverage you will need.  It will also help if you ever have to file a claim.  When making the inventory, write down everything with a worth over $50.  Take pictures or videos of these items, if your camera allows you to put a timestamp on everything, even better.

 This visual record will help insure that all your items are covered.  When it comes time to make a claim the insurance company may not believe that you are a collector of rare antiques and those pictures will be your proof.  Insurance companies are in the business of making money and don’t want to pay out any more than they have to.  Keep a copy of this visual record and inventory in a safe place such as a fireproof box.  Consider keeping a second copy somewhere safe off the premises.

  • Description – Record make, model and serial number of any on all items.  In the case of theft this information helps out the police department and it also helps you justify the estimated cost of an item to your insurance agent.  If you have a $5,000 top of the line gaming computer that is damaged or stolen, if you don’t have this information your insurance company will only cover the average cost of a computer, around $1,300.

  • Location – This is more for your benefit.  When filing a claim you want to make sure you haven’t overlooked anything.

  • Purchase Price, Current Value and Replacement Cost – For most items a best estimate will do.  In the case of things like antiques, stamp or coin collections or jewelry you will probably have to have a professional appraisal done, and the items will probably need to be listed separately on the policy for specific coverage.

  • Incidentals – Don’t  forget to make a record of things like your CD collection, books, and tools.  Also, don’t forget to inventory your basement, attic and garage. 

How To Lower Illinois Homeowners Insurance Premiums

  1. Know Your Credit Score.  The current theory is people with a lower credit score will file more claims.  Whether this is true or not, a lower credit score can drive up your homeowners insurance rates as much as 50%.

  2. Buy Multiple Policies.  A lot of times the carrier of your auto insurance or life insurance policy can also provide you with homeowners insurance.    Many companies offer between a 5% and 15% discount for carrying more than one policy with them.

  3. Install An Alarm System.  Having a home security system can reduce your premium as much as 20%.  The simple act of installing deadbolts can save you 5% on your homeowners insurance.

  4. Senior Citizen Discounts.  If you are over the age 55, insurance companies will give you as much as a 10%.  The reason is senior citizens usually stay home more and notice fires quicker and they have more time to maintain their home.

  5. Stop Smoking.  23,000 fires are caused each year by smoking.  Often time insurance companies will give you a discount if there are no smokers in the home.

  6. Make Your Home More Disaster Resistant.  Your insurance agent can help you out with this.  You may be able to save on your insurance by installing storm shutters or by reinforcing your roof.

  7. Increase  Your Deductible.  A deductible is the amount of money you have to put out toward a loss before the insurance company will pay a claim.   The higher the deductible the lower your rates.  The trick is not putting yourself in a tight spot with this one by raising your deductible too high.

  8. Don’t Confuse Rebuilding Costs With The Cost Of What You Paid For Your Home.  The land your house stands on isn’t at risk for theft, fire and other perils covered in homeowners insurance.  If you ensure the house for what you paid for it you will be paying a lot more than you need to.

  9. Look Into Group Coverage.  Some larger employers offer insurance benefits that give you a discount at a named insurance agency just because of where you work.

  10. Review Your Policy Annually.  Insurance companies often change their rating criteria or based on your current home inventory you may require more or less coverage than you did a year before.

Questions To Ask Your Illinois Homeowners Insurance Agent

Knowing what questions to ask can help you determine if you need extra coverage and where you can save money on your premiums.

  • Ask about deductibles.  Increasing your deductible can help reduce your premium.

  • Find out what is and is not covered.

  • Does the policy cover replacement cost or actual cash value (ACV)?

  • Does the policy include water damage or sewage back up?  These are usually extra items that can be added to your policy for an additional cost.

  • What special coverage options are available?

  • What kind of proof is needed in case of damage, theft or loss?

What If You Can’t Get Illinois Homeowners Insurance?

The state of Illinois offers something called the FAIR (Fair Access to Insurance Requirements) Plan, this can be applied for through any private property insurer.  In order to be eligible to apply to the FAIR Plan you have to have been turned down by three different insurance companies.  Someone from FAIR will come out to inspect your property to see if you are eligible.  Just keep in mind that the FAIR Plan is not guaranteed.

Homeowners Insurance Companies Offering Coverage In Illinois

  • State Farm
  • Farmers
  • Allstate
  • Travelers
  • Nationwide
  • Grange Insurance
  • Liberty Mutual
  • Safeco
  • OneBeacon Insurance Group

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