Purchasing a home involves a lot of effort, time and hard earned money; but it doesn’t end there. Your home needs to be well protected under an appropriate insurance policy. With that said, it is necessary to purchase a homeowners insurance policy to protect your home and personal property. But it’s important to understand your policy before making a final decision.
There are many insurance companies and agents in the market to choose from; however, most policies can be purchased online. However you decide to choose, it’s essential to know the specific details of your insurance plan.
Know the following details before selecting a policy that is best suited for your home:
- Homeowner’s insurance will protect your home and personal property from fire and water damage, theft, injuries and other accidents. Every policy has certain exclusions (typically floods and earthquakes), and coverage amount is determined accordingly. Before claiming insurance, be sure to study to the terms and conditions carefully to avoid making a costly financial error.
- Generally, when filing a claim you will have to agree on a deductible; which should be set to suit your financial situation. In the event of an accident, a deductible is the amount that the homeowner must pay before the provider will cover the rest. For example, Susie’s deductible is $1,000. Her house was damaged by a storm, so she had to contribute her payment of $1,000 before her insurance company covered the remaining repair costs.
Remember, the lower the deductible, the higher the premium; for a lower monthly bill, choose a more expensive deductible.
- The type of coverage you get depends on the policy that you choose. Make sure to find out what is covered and what is excluded in the case of various events. It would be wise to shop around and compare different plans before purchasing the policy that best meets your needs. Meet with an agent to discuss specific details to give you a clear idea of the plans. This can also be done by checking insurance quotes online.
- A typical home insurance policy is divided into two parts:
Part I – Home insurance property protection
Part II – Home insurance liability protection
Part I: Home insurance property declaration is broken down into four main categories of protection that include:
1) Dwelling – The foundation of the house including attached structures, built-in appliances, plumbing, heating/a-c systems and electrical wiring.
2) Other structures – Structures on the resident’s property that are detached from the home such as the garage, sheds and fixtures. Other structures covered in this section are those that are attached to the property such as fences, driveways and patios.
3) Personal property – Personal property in your house is covered on actual cash value or on replacement cost. There may be limits on covering items like jewelry, art, guns, electronics and currency. Motorized vehicles are usually not covered. Study the insurance document thoroughly so you can clarify all matters covered with the company before finalizing on a policy.
4) Loss of use – In the event that you’re denied access to your home (by government order) or if it’s under repair, additional living expenses are covered.
Additional property coverage may be provided if caused by covered dangers (including credit card theft, fire department services, building collapse, services to remove debris and trees, etc.).
Part II: The Home Insurance Liability Protection covers personal liability if you are at fault for causing an accident, injury or damage that occurred on your property. Note that this does not include a family member or someone living with you and is not protect auto related accidents.
Each homeowner’s insurance policy is unique in determining the areas and amount of coverage. Make sure you check with insurance agents and companies to verify all details related to the policy of your choice. Choose wisely and protect your family and home for a happy future!