Getting the Most From Your Arizona Insurance Rates

When it comes to Arizona insurance, there's good news and bad-the good news is that homeowners in the Copper state pay an average of $499 on insurance, hundreds less than the national average of just under $800. The bad news is, nearly 20% of Arizona homeowners are actually underinsured, which means if a natural disaster or fire were to affect them, insurance wouldn't cover all their costs.

Because it's pointless to spend money on insurance that won't cover you if you really need it, knowing the basics of insuring your home can help save you a lot of money and headache if you ever have to file a claim.

Types of Insurance
Arizona insurance rates vary on the type of insurance you purchase. There are 5 main types of insurance you will probably choose from:

• HO-2. A basic policy, this covers your home from damage from the most common perils, including fire, lightning, wind or hail, and theft.
• HO-3. This is the most common single-family policy and protects your home from 16 types of perils. However, this excludes flood, earthquake, war, and any other exclusions listed in your policy.
• HO-4. This policy is designed for renters and insures a renter's personal belongings, loss of use, liability, and medical payments as a result of injury from the most common perils.
• HO-5. This is premium policy covers your home from all the perils that HO-3 covers and also protects the contents of your home as well.
• HO-6. This policy for condo owners covers condos against the most common perils as well as personal liability, in case someone is injured in your home and sues you, and medical payments.
• HO-8. This is a cash value property designed for older homes that may have a lower market value than replacement cost. It covers the structure as well as contents.

Keep in mind that unless otherwise indicated, this only insures the structure of your home. Your personal belongings, like jewelry, clothing, and electronics, will need to be insured separately.

Coverage Amounts
Once you know the type of insurance you want, you can then determine coverage amounts. As a general rule, your Arizona insurance rates should include the following:

• Replacement cost. If your home is a total loss, the replacement cost amount is what is given to rebuild another home. As a general rule, you will want to find out the total amount it would cost to rebuild based on construction costs in your area and insure it for 100%. Coverage options also include lower amounts, but if your house burns to the ground and you only insured it for 80%, you still have to come up with the remaining 20%.
• Contents. Most insurance policies assume your contents to be worth approximately 50% of the value of your home and will insure accordingly. However, if you have items that are worth more, or you think that would be too much coverage, you can do your own inventory and appraisal and modify the coverage amounts.
• Loss of use. This covers the costs to live elsewhere if your home is damaged or if it needs to be rebuilt, like a hotel or short term apartment. This should be enough to cover meals, laundry expenses, hotel or housing costs, and so forth.
• Liability. This is important and frequently overlooked. If someone is injured in your home and decides to take you to court (it happens more often than you might think), liability will cover your legal costs.

Saving on Arizona Insurance Rates
More coverage means higher rates, but you can save on your Arizona insurance rates by shopping around for different quotes and then comparing them. Localinsurance.com takes the work out of this for you by allowing you to compare Arizona insurance rates in your area in a matter of minutes, so you know you are getting the best deal possible.