The State of Missouri does not require owners or tenants to carry homeowners' insurance. However, lenders such as banks and mortgage companies often require coverage that insures a home to the amount of a mortgage or money borrowed. Under Missouri state law, a homeowner can choose a preferred insurer and does not have to use the insurance agent recommended by a lender.
Although the more coverage acquired the less out-of-pocket expense should a loss occur, it's up to a homeowner to determine the amount of coverage.
Three things to consider when deciding home insurance coverage amounts in Missouri:
- Property value – including the cost to repair/replace the home and contents
- Lender requirements – how much insurance does a lender require
- Policy conditions – insurance companies may require homeowners to insure a home to a specific value such as 80% of the actual cash value of the properties total replacement in the event of a disaster
The cost of yearly insurance varies and the style of home construction, the age of the dwelling, proximity to local fire protection and credit score can contribute to the cost of an insurance premium in Missouri. The type and amount of a deductible, the amount a homeowner pays before an insurance company pays out any money, will also determine the cost of a policy. There may also be premium discounts available.
The type and number of perils included in a policy such as fire and theft will also affect a home insurance rate. Policies should clearly outline the perils or causes of loss covered which will help when comparing rates and types of coverage offered.
A company might offer basic coverage often including property damage, additional living expenses, and personal liability; however, a property owner or renter may wish to include additional perils such as flood damage. The inclusion of additional types of coverage will increase the yearly cost of insurance but will also decrease a homeowner's exposure should a loss occur.
Contact the Missouri state Insurance Consumer Hotline at (800) 726-7390 or visit insurance.mo.gov for more information.