You’re probably spending more on your home than any other purchase you’ll make throughout the course of your life, and that’s on par with most American families. The cost of a home is expensive, and you want it protected. If you have a mortgage, you are required by law to carry homeowner’s insurance. If you haven’t a mortgage, you might assume you can get away without carrying a policy but it’s more important than you realize. A good homeowner’s insurance policy protects your home, your belongings, and your finances.
What You Might Not Know About Homeowner’s Insurance
If a hurricane comes through and wipes out your home, you know you’re covered by your policy. You know the policy will cover the losses you suffered, and that helps you rest a little easier at night when you know disaster could strike at any moment. However, your homeowner’s insurance policy covers more than just your home and belongings from damage. It also protects you from liability if anything should happen to someone else on your property.
If someone comes to your home, falls down, injures themselves, and then sues you for negligence, you might face a significant financial problem if you haven’t homeowner’s insurance to cover you. Your policy is designed to cover the cost of medical expenses, lost wages, and the other damages the injury victim decides to sue for. The amount your insurance company pays is dependent on the other party winning the lawsuit they file, but you get the point. Your insurance policy protects you from personal liability.
Not Everything is Always Covered
One thing you must know as a homeowner is your policy doesn’t automatically cover everything you consider important, which is why you must educate yourself regarding your policy options. If you have flood damage coverage, for instance, did you know it might not cover your home in the event a burst pipe floods your home because it’s not the same kind of flood damage? In the same vein, your policy might not cover your valuables for more than $1,000.
If you have expensive jewelry, valuables, antiques, or anything else, you’ll want to document these items and call your provider to add a rider to your policy to cover them because of their value. Finding a homeowner’s insurance policy is a lot more complex than you might imagine. You might need it to protect more than just the cost of your home, replacement, and the items you have inside.
Figuring Out How Much to Carry
Now that you know you have to focus on the individual items in your home, you must also learn how to figure out how much your property is worth. The best way to do this is by calculating the value of your home and the cost to replace your home. You must carry enough insurance to cover the cost of paying off your mortgage if something happens, but your house might be worth more than you owe and you want a policy covering that value as well.
It’s also wise to take into consideration how much it will cost you to replace everything you own. Your furniture, your electronics, your clothing, and your other belongings. It takes years for you to amass all you have in your home, and it’s not something you can replace in a weekend with a small amount of money.
How to Find A Good Policy
Now that you’re ready to shop for a great homeowner’s insurance policy, you must know what to look for.
- Coverage for everything you need - Enough coverage for your belongings and home replacement - An affordable deductible and annual premiums - A company with excellent customer service - A company with high ratings in the industry as well as a strong financial background - Additional coverage for additional valuables you might own
The concept of shopping for homeowner’s insurance isn’t always one you understand right away. First-time homeowners, for example, might not realize precisely what you need, how much you need, or what to look for in a policy. You might assume a policy covers what it needs to cover from the start, but it’s never that simple. You must spend your time doing some research, finding the company that best suits your needs, and figuring out what you can to find the policy you need.
The cost of your annual premium is important, but it’s not the most important factor. If you choose the cheapest premium, you might not end up with the best policy. Sometimes you do get what you pay for, which is why paying a bit more for more comprehensive coverage is a wise idea. It’s not as difficult to shop for homeowner’s insurance as you imagine, but it does require a little more than simply choosing the best price.