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Best Montana Homeowners Insurance

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If you’re a resident of Montana, you know that the weather can get crazy—including tornadoes, forest fires, and gigantic hail. However, there are definitely benefits—and drawbacks—to purchasing homeowners insurance in Montana.

Check out Benzinga’s Best Homeowners Insurance reviews.

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The Best Homeowners Insurance in Montana:

Average Annual Premium in Montana

The average cost of home insurance in Montana is slightly below the national average of $1,132, with Montana homeowners paying an average of $1,034 annually. That’s good news when you consider that the median home value in Montana is just above the national average.

However, averages include highs and lows, and your rate can vary significantly from the mean. Home insurance rates are based on risks in the area, but also on a number of individual rating factors.

Finding the Best Premium for Your Home

Wildfires and floods are cited by Montana officials to be the greatest nature-related threats to homes in Montana — and your home insurance only provides coverage for one of these risks: fires. Floods aren’t covered by a standard home insurance policy and your coverage may be limited in the event of a fire.

Understanding the details of your coverage is just as important as finding a premium that fits your budget. A cheaper policy that can leave you on the hook for tens of thousands of dollars if you have a claim may cost more in the long run.

Dwelling Coverage: The cost of rebuilding your home in the event of a total loss is the biggest part of your home insurance premium. Most claims are under $10,000, but your home is probably insured for 10 to 20 times this amount. Modern insurance policies are written using specialized software to calculate the cost of rebuilding your home.

You may have some latitude to insure for a different amount than calculated by the insurer — but the calculated rebuild cost still exists in the background and can be an important factor in claims. Most homeowners choose to insure for the full rebuild cost.

Be aware that the rebuild cost is different from the market value of your home, although the two numbers may be similar. In some markets, the two numbers can diverge significantly, with rebuild costs typically about 10 percent higher than market value. Another consideration is an insurance “Gotcha!” called coinsurance.

Homes insured for less than 80 percent of the calculated rebuild value will be subject to coinsurance in the event of any claim, which means your claim will be paid at the same percentage as the insured value when compared to the calculated rebuild cost. A home insured for 50 percent of the rebuild cost will be paid at 50 percent of the covered claim amount. Your deductible will also be subtracted from the claim payment.

Personal Property Coverage: Your belongings are also covered on your home insurance policy under personal property coverage. Many insurers set minimum or maximum coverage amounts with a default coverage limit based on a percentage of the dwelling coverage you’ve chosen.

For example, a home insured for $200,000 might have a default personal property coverage limit of $100,000, or 50 percent. You can change this coverage limit as needed, but be aware that the limit is an “up to” figure, meaning the insurer will pay up to that limit — but there are several reasons why you might be paid less in a claim.

Many, if not most, insurance policies are written with Actual Cash Value (ACV) coverage for personal property. With actual cash value coverage, the insured value of your belongings is adjusted for wear and tear due to age.

A television that cost $700 when new might only be paid at $350 in a covered claim now that it’s older. This is the same way the collision or comprehensive coverage for cars works on a standard auto insurance policy, with an insured value that depreciates based on age.

The preferred alternative to actual cash value is Replacement Cost Value (RCV) coverage, which covers your belongings up to the cost of replacing the damaged item with the same item or a substantially similar item.

The $700 television from the earlier example would be paid at $700 with replacement cost coverage, assuming that the replacement costs $700. If the same television model now costs $650, your insurance will pay $650 for that item in the claim.

Actual cash value coverage can leave holes in coverage, particularly if you have a big loss. Imagine a fire at your home destroying several rooms — and everything in them. If your actual cash value coverage is only paying part of the replacement cost, the out-of-pocket costs can add up quickly.

Some insurers offer an option to add replacement cost coverage for personal property, and some even offer replacement cost coverage for personal property as a built-in feature for select policies.

Valuables such as jewelry, furs, and musical instruments have limited coverage on most home insurance policies. Even if your coverage limit is $100,000, you may find a smaller limit on jewelry of $2,500 or $5,000, and a single item limit as low as $1,000.

Particularly valuable items like these can be specifically insured. Your policy will have one of two options, with the first being to add the items to your policy as scheduled items. This insures the scheduled items to their full value. The other option used by some insurers is to purchase a separate policy to insure valuables for their full value, sometimes called a personal articles policy.

Personal Liability Coverage: The U.S. is among the most litigious countries in the world, with one lawyer for every 300 people and an estimated 40,000 lawsuits each year, many involving homeowners. A standard home insurance policy features personal liability insurance, which provides coverage for certain liabilities. Accidents can happen to anyone and you don’t have to be sued to be liable — but if you are sued, your home insurance can provide for your legal defense as well as your liability.

Your personal liability coverage can help cover the costs for:

  • Accidental injury to others
  • Unintentional damage to the property of others

Words like accidental or unintentional occur frequently in insurance documents, making it clear that coverage is only for accidents. Claims due to business activity or illegal activity also aren’t covered.

It’s a common thought that homeowners need more liability insurance than renters because their home is an asset. However, liability judgments don’t hinge on whether you own your home. A renter can face the same liability judgments as a homeowner and has many of the same risks. Risk should be considered as much as assets when determining a coverage amount.

A few questions to ask yourself:

  • Do you have children, and do they bring their friends to your home?
  • Do you have a pool?
  • Do you have parties or house guests?
  • Do home service people ever come to your home?
  • Do you ever have ice on your steps, driveway, or sidewalk?

These common situations all create risks that can lead to lawsuits.

When you start to think about it, everyone has risk of personal liability — and not just at home. Accidents and mishaps away from home can lead to liability claims as well.

A common choice for a coverage amount is $300,000, with a minimum of $100,000 provided with a standard home insurance policy. Upgrading your coverage amount is relatively inexpensive, but if you are considering over $500,000 in liability coverage, ask an agent about an umbrella policy.

An umbrella policy requires a minimum of $300,000 in liability coverage on your home policy — but then extends that coverage by another $1 million (or more) — for both your auto and home insurance policies. Auto policies will have minimum liability coverage requirements as well.

Other Coverages

Medical Payments Coverage is also included with a standard home insurance policy, and is designed to provide for medical care for others who are injured. The base coverage amount is $1,000, with an option to upgrade to $5,000 in coverage for about $10 per year. Your medical coverage is intended to pay for smaller injuries that don’t involve lawsuits — and with an average claim amount of around $3,000, the upgrade to $5,000 in coverage is a sound decision.

Other Structures on your property are covered as a fixed percentage of your dwelling coverage amount unless you choose a different coverage amount. Sheds, barns, storage buildings, fences, and gazebos are all covered by coverage for other structures but pay attention to the coverage limit. Most policies default to 10 percent of the dwelling coverage limit, which may not be enough to provide complete protection.

What’s Not Covered

Home insurance policies come in several types, from the most basic of policies, which only cover a handful of perils, up to “all risk” policies, which cover anything that can cause harm to a home — except for the named exclusions.

The most common home insurance policy types are HO-2, which covers 16 named perils, and HO-3, which covers all perils except for excluded perils. An HO-3 policy provides better protection because it isn’t limited in the same way as an HO-2, but both types of policies leave gaps in coverage for risks to your home. Among the exclusions on both types of policies are things like war and government action, but also some nature-related risks, such as flooding and land movement.

Coverage for land movement can be added to some policies, but coverage for floods will require a separate flood insurance policy.

Damage to your home caused by intentional acts, due to illegal activity, or due to business activity also aren’t covered by your home insurance policy. Some insurers provide the option to add coverage for home-based businesses.

Deductibles: In a covered claim, the insurer only pays part of the claim. The deductible is the amount that you pay toward your claim. In most cases, a minimum deductible of $500 to $1,000 is required, but deductibles can also be based on a percentage of the dwelling coverage.

For example, a home insured for $200,000 with a 2 percent deductible leaves the homeowner responsible to pay $4,000 toward the repair of the home or replacement of personal property. Choosing a higher deductible will lead to lower premiums, but also more financial exposure if you do have a claim.

Discounts: The most common discount offered by insurers for home insurance policies is a multi-policy discount, which usually applies a discount to both your home insurance and auto insurance policies. Customers who have multiple insurance policies with the same insurer are more likely to stay with that insurer for a longer period of time, so it’s difficult to find an insurance company that doesn’t offer this discount.

The multi-policy discount applied to the auto policy is typically smaller, but the discount for the home insurance policy can be up to 30 percent or more.

Common home insurance discounts:

  • Multi-policy discount
  • New home buyer discount
  • New customer discount
  • Discounts for home safety features
  • Green home discounts
  • Claims free discounts
  • Discounts for affinity groups
  • Early signing discounts
  • Discounts for home improvements

Multi-policy discounts and claims-free discounts tend to be among the largest percentages. Discounts for new customers can be attractive as well — but the new customers or welcome discounts don’t last forever, so don’t let these discounts be the deciding factor when choosing an insurer.

Flood Insurance

The year 2011 was difficult for many in Montana as snow, ice-jammed rivers, and heavy rains submerged areas in every corner of the state. Some areas are more prone to flooding due to terrain or proximity to water, but floods can be fast and unpredictable — and they aren’t covered by home insurance.

Coverage for damage caused by floods requires a separate flood insurance policy, which provides some financial protection for damage your home and its contents. Most insurance agents can furnish a quote and prices are based on risk and insured value. Homes on higher ground are less likely to be damaged by floods and will pay lower rates. Smaller homes, or homes that cost less to rebuild, will also have lower rates.

Expect premiums to range from a few hundred dollars per year to a few thousand for homes in higher risk areas or with higher insured values.

Top Picks for Montana

Pros
  • A long and considerable list of discounts that can save you hundreds of dollars
  • An excellent roster of online tools, including a comprehensive coverage calculator, and a highly-rated app for iPhone and Android systems
  • Ability to manage and track claims directly from computers or mobile devices
Cons
  • Decent financial stability, but could be improved
  • Customer service and claims handling not always consistent or satisfactory
  • Certain natural disasters, including floods and earthquakes not covered under a traditional policy — a rider needs to be purchased that includes the specific coverage if needed

1. Liberty Mutual

A mutual insurance company is owned by its customers, and Liberty Mutual has been insuring its owners since 1912. Now a multinational corporation with services worldwide, Liberty hasn’t forgotten its All-American roots but uses its financial strength and decades of experience to provide a product designed to offer more features, benefits, and discounts to its customers.

Valuables such as jewelry and furs can be added to your Liberty Mutual policy, insuring them for full value and Liberty offers an option to add expanded coverage for cost overruns and unexpected expenses when repairing your home or replacing your personal property in a covered claim. The company also offers a concierge service to locate replacements for damaged belongings and offers an impressive list of available discounts.

2. Mountain West Farm Bureau

Born from a partnership between the Wisconsin and Montana Farm Bureaus, Mountain West Farm Bureau Mutual Insurance Company provides a number of insurance solutions for residents of Montana including home, auto, business, farm/ranch, and life insurance.

Personal property can be insured for full replacement cost, helping to assure that you won’t be left with a big expense if your belongings are damaged in a covered claim. Discounts are available for customers who purchase both home and auto insurance through the company as well as loyalty discounts and a special discount for roofs constructed with wind or hail resistive materials.

Pros
  • Prepackaged options that make buying easy
  • Other lines of insurance available
  • Above-average claims service
Cons
  • Below-average customer service ratings
  • Must buy coverage through an agent

3. Farmers

Started in 1928, Farmers now insures over 10 million households and holds 19 million policies throughout the U.S. A massive network of 48,000 exclusive agents provide service and easy access for coverage or policy questions. Farmers is actually a group of companies, which gives the company additional options for underwriting and rates while also enabling Farmers to provide a policy for nearly any insurance need.

Valuables can be specifically insured with a personal articles floater so you don’t get short-changed on claims for your precious belongings. Discounts are available for bundling home and auto, certain home renovations, and for non-smokers.

Pros
  • Website provides helpful information
  • A nationwide network of over 18,000 agents
  • Sizable discount on auto policies for customers who also purchase life insurance
Cons
  • Premiums may be higher than some competitors
  • Less flexibility in term lengths

4. State Farm

Similar to Farmers, State Farm has a massive exclusive agent network, but unlike Farmers, which centralizes some of its agents in corporate locations, all of State Farm agents are in your neighborhoods or local shopping areas.

State Farm spends invests heavily in training and the result is a very knowledgeable agent base, which is invaluable if you have coverage questions or need some friendly guidance in regard to your policy options and coverage needs. Impressive discounts are available for bundling home and auto and State Farm is a full-service insurer, able to effectively insure small businesses, homes, autos, and even provide life insurance and investment services.

Check out Benzinga’s State Farm Life Insurance Review.

5. Travelers

While not as well-known as some of the other insurers in our Montana roundup, Travelers is actually the 6th largest home insurance provider in the country, making the New York-based insurer a company worth a closer look. Another full-service insurer, Travelers can cover your insurance needs of nearly any type.

Replacement cost coverage is available to protect your belongings up to their full value, and the company offers an option to expand coverage for personal property beyond the coverage typically provided by a home insurance policy. Discounts are available for bundling multiple policies, claims-free customers, and customers with green home certifications.

Take Action

When it comes to protecting you home, your insurance options can become a bit complicated, causing many consumers to have less of an understanding of their coverage than they’d like to have. Even policies of the same type (HO-2, HO-3) can begin to diverge in how well they cover your home because some insurers provide options to fill coverage gaps while others can leave you exposed.

Many consumers find it helpful to meet with an agent to discuss their needs. Technology makes it tempting to forgo speaking with anyone face-to-face, but the in-person conversation can help to uncover hidden risks, create awareness of discounts, and put to rest any lingering questions you may have about your coverage.

Frequently Asked Questions

1) Q: What are the most common types of home insurance claims?

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1) Q: What are the most common types of home insurance claims?
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Wind and hail claims top the list with nearly 40% of all home insurance claims due to these two acts of nature. Fire and lightning are the second most common, but claims due to fire tend to much bigger than claims dues to other types of risk. The possibility of a total loss is why it’s so important to insure your home for the full cost of rebuilding. Get a custom quote today. 

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2) Q: How does home insurance liability coverage work?

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2) Q: How does home insurance liability coverage work?
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Most home insurance policies provide liability coverage that can help protect you and your family against several types of lawsuits or liability claims. Coverage limit options usually begin at $100,000 and can go as high as $1 million. Your liability coverage provides coverage for common mishaps, like slip and fall accidents or animal bites and can protect you even when you are away from home. However, home insurance liability coverage does not provide coverage for automobile-related liability or liability related to business activity. Get the best home coverage and policy through our top providers today. 

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3) Q: If I drop my computer, will home insurance cover the cost of replacement?

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3) Q: If I drop my computer, will home insurance cover the cost of replacement?
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Home insurance policies usually cover personal property for a specific list of risks, called named perils. These perils might include fire, theft, burst pipes, and more, but dropping your laptop or TV or spilling soda on your new game console isn’t covered. See the best home insurance providers for a custom quote.

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