Your home is one of the biggest purchases of your life and also, one of the most vulnerable. Your home protects you from many of the dangers of life.
You need to make certain that you have insurance in place so that you can safeguard your investment if something serious should happen to it.
You know that your insurance protects you from loss, but do you really understand what your home owner's insurance covers?
What Home Owners Insurance Covers
Unless you pay cash for your home, a mortgage lender will require that you have adequate insurance as part of their terms. If you fail to get the required amount, they can purchase a policy and they will add the charges to your monthly mortgage payment.
The things that home owner’s insurance covers will vary depending on the state you live in. Some of the most common types of disasters covered include:
If it’s not listed on your policy as a covered event, you won’t be able to make a claim so it’s important to read your policy carefully.
Basic Coverage
Most policies will include four basic types of coverage:
Your dwelling - This covers the structure of your home and your policy will pay to rebuild or repair your home if that event is covered. It’s important to understand that it does not cover damages caused by earthquakes or floods. You must have a separate policy for those.
Personal property - This includes the content of your home. It’s important to do an inventory of your home’s contents so you know exactly what might need to be replaced if disaster strikes.
Many people don't realize that coverage includes items stored outside of the home. There is also coverage if someone steals and uses your credit cards.
For expensive items such as jewelry or artwork, there may be a dollar limit for the amount of coverage.
Liability - This coverage will protect you if someone is injured on your property or when a family member damages someone’s property. It can even cover damage caused by pets, such as a dog bite.
If you are sued, liability will pay for your court defense, as well as any monetary awards. The limit will be stated on your policy.
Other structures - If you have other structures on your property, such as a garage, shed or fence, your policy will cover it. Be sure to let your insurance company know if you add any new buildings or structures to your property.
Deductibles and Coverage Limits
There are dollar limits for each type of coverage that your insurance company will pay. Each policy is different because it will depend on the value of the home and the budget of the buyer.
A deductible is a set amount that you have to pay before the insurance company begins paying for the loss. The amount of your premium is dependent upon your deductible. If you opt for a higher deductible, your premium will be lower.
There are pros and cons for choosing a high deductible on your policy and it's important to understand just how this works in the event of a disaster.
The minimum amount of insurance you get should always cover the cost of replacing your home.
Make sure that your policy includes inflation protection. This will increase the replacement cost of your home over time.
It's always best to compare home insurance companies and options to get the best price and save you money.
Where to Get the Best Home Owners Insurance
If you want the most fair and honest home owner's insurance quotes, why not start here? You can schedule a consult today to learn how to get the best coverage for your home.
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