Homeowners insurance is an intelligent investment, often required by mortgage lenders, that protects both your home and its contents from potential damages. The policy can cover everything from damage caused to its structure to theft of personal items stored therein.
Homeowner policies also provide liability protection. While certain disasters are excluded from standard homeowners policies, you can usually purchase additional policies or endorsements to increase coverage for them.
1. Protect Your Home
Homeowners insurance provides financial security so you don’t have to cover repairs or reconstruction of your home from personal savings alone, replace personal items lost or stolen on the premises and provide coverage if someone gets hurt on it.
Mortgage lenders require homeowners policies as part of your mortgage agreement; once it’s paid off it’s up to you whether or not to continue holding one; but doing so would protect both your investment and assets in your home.
When shopping for home insurance providers, be sure to consider both cost and reputation when making your choice. When researching companies online you can access ratings from credit agencies (AM Best, Moody’s and Standard & Poor’s), consumer feedback and complaints as well as their ability to pay claims. It is also essential to fully comprehend what coverage your policy will cover before searching out possible discounts; having a higher deductible, quitting smoking or installing safety features like alarm systems could all qualify you for lower premiums.
Even if you can afford to repair or replace your home and belongings out-of-pocket, having a homeowner’s policy provides peace of mind. Accidents and disasters can strike at any time and in any place.
2. Protect Your Personal Property
Home insurance protects more than just your physical structure; it also covers your personal belongings. Should the unthinkable happen and any of your belongings are stolen or destroyed, homeowner’s policies provide coverage. This benefit is especially useful for renters as landlords’ property insurance generally won’t cover them.
Your policy outlines what structures and events qualify for coverage and how much compensation is payable in case they occur. There are eight standard homeowners policies (HO-1, HO-2, HO-3, HO-4, HO-5, HO-6, HO-7 & HO-8), each offering different kinds and levels of protection.
Conduct a home inventory as one way of estimating how much personal property coverage you require. List all movable items, from furniture and clothing to jewelry and art. Group them by type with descriptions, purchase price estimates and estimated current values included for each. Keep receipts for appraisal documents safe. Update this list annually!
Your insurer will set a limit for how much of your personal property they insure, though you may be able to add coverage for specific items which are expensive or rare. Insurance experts often suggest going a bit above this amount for added peace of mind when insuring irreplaceable belongings.
3. Protect Your Liability
Though home insurance isn’t required by law, mortgage lenders have an vested interest in making sure your home is adequately covered in order to safeguard their investment and provide financial security in case any losses exceed your coverage limits.
A typical homeowners policy typically provides coverage to repair or rebuild your home, personal property coverage for replacing belongings that have been lost, detached garage, fence and shed coverage as well as earthquake and flood coverage. Some policies also may provide coverage against earthquake and flooding events.
Thurman recommends doing your research and understanding how your policy works to select an insurer that best meets your needs. Start by comparing costs from various insurers using impartial sources like your state insurance department, consumer publications or the public library.
Before purchasing an insurance policy, take an inventory of your possessions to help assess how much coverage is necessary. Arrange them into categories, such as celebration purchases or everyday leisure items; document each with a description, purchase date, and estimated current value estimate.
Once you have purchased a policy, work with an independent agent who can explain its contents clearly and answer any questions that arise from your policy purchase. They can also assist in selecting an affordable deductible amount and adding options for additional living expenses in case an evacuation becomes necessary.
4. Protect Your Financial Future
Home insurance should never be seen as a luxury–it should be seen as an absolute necessity. Not only is mortgage lending required to have homeowners insurance in place, but obtaining one yourself may still provide peace of mind against costly property losses or potential liabilities.
Homeowner’s insurance provides financial security against disasters such as fire, storms and theft. A typical policy offers dwelling coverage to repair or rebuild the structure of your home; personal property coverage to replace your belongings; and additional structures coverage such as detached garages, fences or sheds.
When looking for a homeowners policy, your goal should be to find one that provides comprehensive yet cost-effective coverage. Working with an independent insurance agent is one of the best ways to do this, as they will assist with identifying which coverage fits best with your situation and explaining any policies clearly to you in plain language – as well as answering any of your queries that arise along the way.
An experienced agent can assist in narrowing down your choices and finding competitive prices, while online tools allow for research of companies using ratings such as AM Best, Moody’s and Standard & Poor’s ratings as well as consumer feedback to gather insight into customer service levels and claims processing efficiency.
