Homeowners and potential homeowners alike know that homeowners insurance is a necessity. Homeowners insurance is used to protect you and your mortgage company from major financial loss. Even though this insurance coverage is important, many homeowners find it confusing and don’t consider it as much as they should.
The answers to many homeowners insurance questions vary, and this can make it hard to get solid answers when you don’t know all the facts. Thankfully, there are a few general truths about homeowners insurance that can help you work your way through the buying process. This post will go into some detail about homeowners insurance to make sure that you understand the basics of this kind of coverage.
Why Do You Need Homeowners Insurance?
There are many reasons why homeowners insurance (home insurance) is needed for homeownership. If you have a mortgage, your lender will require you to have home insurance for your property. If something terrible was to happen to your property, the lender wants to make sure their investment will be protected. Coverage will vary between lenders, so contact your lender to learn about what they will require from you.
Home insurance also protects you, your home, and your assets. Think about the things you store in your home. Not only do you have your clothes and furniture, but people also tend to store expensive things in their homes as well. We also can’t forget that there’s the house itself, which is a huge asset. With home insurance, it gives a homeowner a sense of security in case disaster strikes. They’ll be able to recover and not have to pay for their losses out of pocket.
What Homeowners Insurance Covers
Home insurance policies are customizable, and the cost of your coverage will depend on your policy. However, policies usually cover:
Home or Dwelling Coverage: This applies to damages from extreme weather, smoke, fire, vandalism, and theft. If you don’t have a rider, floods, earthquakes, and poor home maintenance may not be covered.
Liability Coverage: This is used if someone gets injured on your property and decides to sue you. Liability coverage helps pay for medical or legal expenses.
Personal Property: Dwelling coverage covers the interior and exterior of your house, but personal property coverage covers the things inside of your home. It’s a good idea to keep a log of everything you own so you can get your belongings back if disaster strikes.
Living Expenses: If a covered event occurs and you have to move out, this kind of coverage will help you pay for your temporary housing.
If a covered event occurs, you will be compensated to fix or rebuild your home. Read through your home insurance policy so you can know how much you will be compensated during a covered event. Some will pay cash value while others might offer a replacement cost value, but compensation will vary between policies.
What Determines Your Homeowners Insurance Rate?
Homeowners’ insurance rates depend on what your home is made of, its location, and the crime rate in the area. The number of claims filed at a property and in your own history will also impact your insurance rate.
There are still other ways for you to lower your insurance premiums. Get in contact with your insurance provider to see if you can get any discounts. You can also see if increasing your deductible will lower your monthly premiums. Adding safety features like alarm systems, smoke/carbon monoxide detectors, and other features can help you lower your costs as well.
Where Do You Get Homeowners Insurance?
There is a large number of highly ranked insurance companies that can help you protect your home. You can even get in contact with an insurance broker who can shop the different policies for you.
Don’t forget that home insurance is incredibly customizable. After you work hard to find the right house, take some time to find a home insurance policy that fits your needs as well as your home does.
If you already have a home insurance policy, take some time to review it to make sure you have the correct coverage for the current condition of your home. For example, if you’ve added a playground or a pool, you’ll want to update your coverage. If you have any further questions, contact your insurance provider today!
