When shopping for homeowners insurance, a home owner has a lot of options to consider. What company should I choose, which coverages do I need, should I choose strictly off of price? Let us make it easy for you and introduce you to Erie Insurance. Erie insurance has one of the best homeowners policies in the market today. They are extremely competitively priced but even better than that, Erie offers some of the most extensive coverages. Here are three reasons why you should have an Erie insurance homeowners policy.
1. Guaranteed Replacement Cost
Erie writes their home policies on guaranteed replacement cost, whereas most companies do it solely on replacement cost. This means that with other insurance companies you may not be able to rebuild your home exactly how it was before a total loss such as a fire or tornado. Replacement cost or the “Coverage A” in your policy is the maximum that the insurance company is contractually obligated to pay you to rebuild your home. The issue arises when the actual cost to rebuild your home exceeds the amount listed as the replacement cost. Some examples would be a spike in material cost, additions that you did not tell the insurance company about therefore they were not taken into consideration in the replacement cost calculation, or increased labor rates. Whatever the amount is exceeding the replacement cost becomes the responsibility of the homeowner.
Guaranteed replacement cost on the other hand still calculates an estimated replacement cost for your home, but the insurance company will pay more than the stated replacement cost if necessary. We love this coverage because it gives our customers peace of mind that if something would happen to their house, they will be covered regardless of the current economic environment.
We recently had an example of where guaranteed replacement cost saved one of our customers a lot of money. Last year a customer of ours had a fire. Let’s say their policy had $300,000 coverage to replace their home. In 2021, we saw lumber prices rise 129% and plywood rose an astonishing 165% in just a few months. This happened to be the time when their house was being rebuilt. That meant that the actual replacement cost on this property was likely going to be a lot more expensive than what was initially stated on the policy. That was true, by $130,000. So, instead of the homeowner personally paying out a whopping $130,000, Erie said, “Don’t worry about it. We will cover that additional $130,000 to have your home rebuilt, thanks to guaranteed replacement cost.
2. Erie Insurance is a Regional Carrier
One of the pros about Erie Insurance is that they are only located in 12 states. Why this is a positive thing for the residents of these 12 states is because regional insurance companies can offer better rates, because they are selective in where they do business. Think of it this way- because Erie is selective, they don’t have to factor risks such as hurricanes down in Florida, wildfires out in California, or tornadoes in certain midwestern states, into your premium.
Erie Insurance’s strategy is working with the 12 states that they know the risks, and they are not going to deal with large loss events such as wild fires or hurricanes. This has resulted in their rates being low and staying low consistently year after year. We recently quoted somebody who was with Liberty Mutual Insurance and over the past three years, their homeowner’s insurance went up $273. Similar customers with Erie saw a three-year price increase of only $76. That is $200 extra, in three years, that these national insurance companies increased premiums because they had to deal with things such as wildfires, hurricanes, and tornadoes.
3. Additional Coverages
Erie throws in a lot of extra coverages, things that most companies don’t have. Erie offers one of the best Homeowners products on the market, and it one that most other carriers are not able to compete with. One of the best coverages they offer is ‘back-up of sewer and drain’ coverage. Hurricane Ida recently came through our area, and a lot of people had water in the basement that came in through failed sump pumps. That would be covered under Erie’s Homeowner’s Policy with back-up of sewer and drain. We recommend at least $5,000 to cover the restoration company cleaning up the mess. If your basement is finished you should increase this coverage so that the damage to carpet, drywall, furniture, is covered.
Another great coverage Erie insurance provides is underground service line. The lines servicing your home such as electric or water lines are your responsibility, from the street to your house. This is a surprise expense to many homeowners and can cost as much as $20,000.
One of the best coverages Erie insurance provides is equipment breakdown. Very few insurance companies will offer you this sort of coverage. Equipment breakdown will cover any type of equipment in your home that breaks down, it’s that simple. Some of the most common forms of equipment Erie covers are hot water heaters, HVAC systems, and water pumps.
Those are three reasons why you want an Erie insurance homeowners policy. We at Susquehanna Insurance represent Erie Insurance. If you’d like an Erie Insurance quote, give us a call 717-290-7780 and we’ll be able to walk you through the different options, the different coverages, and see what’s the best coverage that fits your lifestyle and also fits your budget. Give us a call. We’re bringing clarity and simplicity to your insurance needs.