Homeowners Insurance: The Basics


If you own your own home or are looking into buying a new home in the future, getting the information you need about homeowners insurance is an important step toward protecting your home and your family’s belongings. Here are some things to consider as you continue on the road to homeownership.
If you own your own home or are looking into buying a new home in the future, getting the information you need about homeowners insurance is an important step toward protecting your home and your family’s belongings. Here are some things to consider as you continue on the road to homeownership.When beginning to look for homeowners insurance, your best place to start is with your auto insurance agent. As Kimberly Lankford of Kiplinger.com notes, “You generally get a discount on your auto and home insurance if you have both policies with the same company.”
If your agent is an independent agent, he or she may be able to acquire different price quotes from several insurance companies. In addition to this, however, you may want to look into quotes from one or two larger companies so that you can make a valid comparison of price and coverage. Before you even begin looking for insurance, however, it’s important to know some of the basics, such as the following:
  • How much coverage you need. A home’s insurance is not actually based on the market value of the house; instead, the insurance is based on the cost to rebuild the home.
  • How much of your possessions your insurance will cover. Homeowners insurance will automatically cover your possessions, based on a specific percentage of your home’s established insurance value—the average percentage of coverage is 75 percent. If you have any particularly valuable possessions, like artwork or jewelry, it would be wise to get additional coverage for these things.
  • What deductible will be manageable. Choosing a deductible that is at least $1,000 will help reduce your premium and deter you from filing smaller claims that could result in your insurer dropping your policy.
  • Your insurer’s history and reviews. The National Association of Insurance Commissioners Consumer Information Resource (www.NAIC.org) provides a complaint record for insurers so you can check out their background before making a decision.
“In the event of an environmental disaster or an accident on your property, homeowners insurance is a safety net that can protect your finances from potential depletion,” notes Jonathan Slappey of QuickenLoans.com. “While homeowners insurance typically includes liability coverage and property insurance, damages to your home due to floods, war or termites are usually not covered with standard policies.”
Although you may have a general idea as to what your homeowners insurance may cover, there are some additional areas that you can get protection for that you may not realize. Although you may have a general idea as to what your homeowners insurance may cover, there are some additional areas that you can get protection for that you may not realize. Here are some added benefits of homeowners insurance:
  • Covers bringing your home up to code following a covered loss. Should something happen that damages your home, such as a grease fire, and new code is passed requiring additional features in the same area of the loss, such as mandatory installation of a sprinkler system, this work may be covered.
  • Covers damage due to falling debris. If a branch falls on your home or some other kind of debris damages your roof, these damages may be covered by your policy.
  • Covers damage due to power outages. Families that lose power due to natural disasters such as ice storms or hurricanes may be covered for perishable items from their refrigerators.

There may be additional benefits available with your homeowners insurance policy that you aren’t aware of. Talk to one of our insurance affiliates or your local financial professional to get a better understanding of what your current policy offers or what your potential policy will cover.

 

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