Last Updated on September 29, 2020 by Andrew Lee
As a resident of Kentucky, you’ve paid quite the sizeable amount of money for the purchase of a home in the state. In fact, as a mortgage borrower, you’re still spending money on it, especially if your lender required you to insure your home.
Note though, that whether or not the mortgage company required you to purchase a Kentucky homeowners insurance policy, you shouldn’t treat it as just another expense. This type of insurance can be of immense help in the event that a disaster occurs and you find your home and/or its contents damaged or lost.
A quick overview on homeowners insurance in Kentucky
The Kentucky Department of Insurance says that all homeowners should purchase and maintain even just the basic homeowners insurance coverage. The same goes true for renters, although they only have to insure their personal property and belongings, since their landlord should take responsibility for insuring the building itself as well as its components.
Homeowners paid an average of $981 compared to the national average of $1,096
Deductibles: What you need to know about them
The Kentucky DOI defines deductibles as the amount you have to pay for when you experience property damage or loss before your insurer settles with you. All homeowners insurance policies come with this, and so do renters insurance. It is important you take into consideration your own financial capabilities when choosing how much deductible to obtain.
Note also that the total money you have to pay towards your premiums depends on whether you chose to have your claims paid on an Actual Cash Value or Replacement Cost Value basis. Several other factors include the specific neighborhood and city in KY you live in, as well as the insurance company you choose to work with. Your insurer may give you discounts when you install safety and security systems in your home.
Key Facts and Market Trends in Indiana: The National Association of Insurance Commissioners (NAIC) released the results of its recent study concerning the average homeowners insurance premiums in the country and in all of the states. As for the national average, it amounts to $1,096. State-wise, it is $981 for Kentucky.
Critical terminologies you should have a basic understanding of
In the world of homeowners and renters insurance, there are many terminologies you’ll encounter. You don’t have to memorize them all, but it pays to at least have a basic understanding of the most commonly used ones. Here are just a few of those you should learn more about:
- Actual Cash Value – Also referred to simply as ACV, this refers to an item’s value at the time of the damage or the loss.
- Additional Living Expenses – This covers costs outside of your standard expenditures in the event an insured disaster hits your home and renders it unlivable for a period of time.
- Exclusion – These are the types of items, properties, situations, or individuals that your policy doesn’t cover.
- Perils – An insurance term referring to events or situations that cause property damage or loss, including theft, fire, windstorm, etc.
- Replacement Cost – Commonly shortened to RCV, this is the amount of money needed for item replacements.
There are many others words you will hear or read about relating to your homeowners or renters insurance, but the ones above are some of the most critical.
National vs. Kentucky’s average of homeowners insurance premiums
Financial resource expert Value Penguin further backs this up with information on the monthly average of KY homeowners insurance premiums. According to the firm, KY homeowners pay $72.02 on average, every month.
Events and occurrences that cause property damage or loss can make a huge dent in your wallet. So don’t take Kentucky homeowners insurance policies for granted; these can make all the difference in your life not just as a home owner, but as a person in general.