Last Updated on May 20, 2021 by MoneyVisual
The purpose of homeowners insurance is to provide financial protection for your home against disaster.
The coverages are meant to repair or replace the personal belongings in the event of certain perils such as theft or fire.
It can also provide coverage against accidental damage to property or when someone gets injured in your home. The majority of such insurance will provide four types of basic coverages:
Coverage For the Structure of the Home
The homeowners’ insurance is supposed to pay for the repairs or rebuilding of your home if it is damaged because of a hurricane, storm, or any disaster that has been listed on the policy. The home insurance policy will also cover structures such as a gazebo, garage, or tool shade.
Most standard insurance policies will not provide coverage for routine wear and tear, flood, and earthquake. When buying insurance coverage, it is imperative that you’re getting a policy that will be sufficient enough to rebuild your home in case of a disaster.
Coverage for Personal Belongings
Personal belongings such as sports equipment, furniture, clothes, and any personal item are covered when destroyed in the list of insured disasters. Such coverage will be up to 70% of the insurance of the house.
One of the best ways you can know what can be covered is by carrying out a home inventory before taking on a policy. There are dollar limits to valuable items such as jewelry and collectibles.
This will provide protection against lawsuits in case someone gets injured in your home or property. It will also provide protection for damages that are caused by your pets.
There are limits with this kind of insurance and will be stated in the policy documents. The limits will start at about $100,000 and it is important to know what you’re getting yourself into before putting anything to pen and paper.
Additional Living Expenses
The insurance can also provide coverage for the expenses accrued living away from home because of the damage to your home. It will cover restaurant bills, hotel rooms, and the usual expenses that might have been incurred during the stay away from home. It should be noted that such coverage will also have limits which you should be aware of from the onset.
Finding the Best Home Insurance Company
Having looked at some of the different types of homeowners insurance, the next hurdle will be to get the right insurance company. This could be a challenging endeavor as there are countless such companies with attractive rates. There are some key considerations to keep in mind and some of them include:
Be Aware of Location
Where you live could have a big impact on how much you pay for premiums of the homeowner’s insurance policy. You’re likely to pay more in premiums if you live in an area that is prone to natural disasters.
The neighborhood of choice could also have a bearing on the rates. Neighborhoods with high crime rates could increase insurance rates.
How Much is Enough
Numerous studies have shown that the majority of Americans are underinsured. The cost of building materials has significantly gone up in the last couple of years.
If you live in an old home, you might be required to pay a lot more for the repairs and replacements. That is why your insurance coverage might not be sufficient to take care of the expenses in case of a calamity.
Protecting Financial Assets
The repairs and the replacement for the damages is just one side of homeowners’ insurance claim. A good policy is one that goes beyond that and will ensure that your financial wellbeing is taken care of during the coverage period.
Just as with the different types of insurance, it is possible to determine the deductible level with homeowners insurance. When you decide to go for a higher deductible, you’re likely to pay less for monthly premiums.
Just because you have homeowners insurance doesn’t mean you should neglect to do maintenance. Routine maintenance will help in uncovering potential problems that could result in serious damages down the road. You also don’t want a lack of preventive maintenance to interfere with insurability.
To have peace of mind, it is recommended to look for an insurance company that is reliable and trustworthy. Check out reviews and reach out to references provided to have an idea of the services that you can expect from the insurance company.