|Home Insurance Facts|
Majority of people would consider that their home is the biggest and most important investment they had made. So, it is only reasonable to insure that very valuable property with Home insurance.
The task of choosing the best home insurance can be quite challenging. Keep in mind that you can’t be approved for a mortgage when you do not have home insurance. Lenders will require potential homeowners to acquire one. However, the requirement is very minimal and not as expensive as you might think.
The minimum insurance requirement is what you call “Hazard Insurance”. It is basically a part of most standard home insurance policies. Coverage is seemingly adequate as it will cover various unintentional damages brought about by fire, weather catastrophes, theft, and the like. But it would be best to get a more comprehensive policy for a much wider and useful coverage.
A standard home insurance policy covers property damage caused by certain unintentional disasters. Personal belongings are also covered up to an extent. Additionally, there is personal liability as well, which protects family members from lawsuits related to entry or property damage they may cause to other people. Last but not least, there is medical coverage, which pays for the expenses of non-family members injured on your property.
Things to consider when purchasing home insurance:
- It is also important to calculate the insurance you need to carry. Home insurance reimburses you for the cost per square foot of rebuilding your home and not the market value of the house.
- Figure out how much it would take to replace the contents of your home. You can record them by taking photographs or videotaping the items. If you prefer, you can hire a professional appraiser to help you with the process.
- Note that a standard policy has reimbursement limits. Therefore if you own something particularly valuable that exceeds the limit, buy a separate policy for it. You will have to prove its worth with an appraisal.
- You can also consider buying additional coverage. Damage from fire or lightning may be covered in standard policies but bear in mind that flooding and earthquakes are not. Hurricanes are generally covered but the floods they cause are normally not included.
- Living in an area prone to disasters will make rebuilding costs to skyrocket. If this is the case, you might want extended replacement coverage which gives you an additional 20 to 25 percent over your policy limit.
- Weigh the pros and cons of the cash value policy, which give the money to replace your belongings minus depreciation, versus a replacement cost policy, which reimburses you for the current costs for replacing your goods. Take note that replacement cost policy has higher premiums.
- Get at least three rate quotes since premiums can vary wildly. It is also recommended to check for the financial health of the insurance companies you are considering. Search online for their financial strength ratings.
- You can also check rates with your car insurer if you own a car as some companies would normally give discounts to customers with multiple policies.
- Ask if you qualify for a premium discount especially if you have a security system, an upgraded electrical system, or a new plumbing. Choose the highest deductible you can safely afford. It can reduce your premiums by as much as 25 percent.
- Review your policy and alert your insurance company anytime you make substantial renovations or a pricey purchase.