What You Need To Know About Homeowners’ Insurance

A homeowners insurance policy is a type of insurance that protects your property and belongings. On top of this, it also covers liabilities such as accidents that occurred on your property. It is always a smart move to purchase homeowner’s insurance to protect all of your valuable items and property.

Now, four kinds of incidents fall under homeowner’s insurance coverage. These are loss of personal items, exterior damage, injuries obtained within the property, and interior damage. When a claim is made in these instances, the owner will pay a deductible when the claims exceed the amount of coverage on their insurance.

For example, your house was damaged by a fire and your home needs to be repaired. You asked your insurance agent to assess the damage. Upon their review, the estimated cost of the repairs would be $15,000. However, for example, let’s say your homeowner’s insurance coverage could only pay $12,000. That means that the remaining amount would have to come from your own pocket which would be called the deductible.

Even if you would have to shell out $3,000, it’s better to have help in lessening the financial costs rather than paying the whole sum. We’re just scratching the surface of the homeowner’s policy. Let’s dive deeper and learn more about it.

What Are the Types of Coverage?

There are different types of coverage for homeowners’ policies. The lower the premium, the lower the amount of coverage you’ll get, and vice versa. It’s best to know the types of coverage to better understand what you are paying for. They are:

  • Actual Cash Value – This covers the amount of your house and the value of your possessions. However, depreciation will be accounted for and deducted from your belongings. Depreciation refers to how much all your items are worth currently, not what they cost the day you bought them.
  • Replacement Cost – The difference between replacement cost and actual cash value is that this coverage does not deduct depreciation from your personal items and property. The value of your belongings will be determined by the current market prices of your items. This makes it easier to fix and rebuild your home to its original value.
  • Guaranteed Replacement Value – This type of coverage is the most comprehensive of all. Guaranteed replacement value pays for damages and repairs of your properties and belongings, even if they exceed the amount of your coverage on your policy. However, it does have a limit of 25% more than the initial coverage.

What Doesn’t It Cover?

Homeowner’s insurance is a valuable asset to have when accidents, theft, or other similar situations happen. While there are a ton of things that it covers, there are, however, some instances that are not protected by this policy. Floods, earthquakes, and other natural disasters are not on the list of coverages on homeowner’s policy. There are separate insurances for those types of circumstances. 

On top of this, you can also add sewer and drainage backup to your current policy which is not included in the initial coverage. That way your home can be fully protected and insured. Contact an insurance agent to add more coverage to your policy.

How Much Insurance Coverage Do You Need?

The homeowner’s insurance policy coverage will depend on your current living situation. The dwelling coverage will depend on the extent of the damages inflicted on your home. If you have an expensive house, then your premium or coverage will be much higher. The same goes for owners who have cheaper homes.

For structural, personal property, and personal liability coverages, they will be counted as percentages of your dwelling coverage. However, personal liability will depend on individual circumstances. Things like owning a pool, trampoline, or hosting for guests, all fall under these circumstances. You should talk to an insurance agent if you want help finding the right coverage for you.

Contact an Insurance Agent

Homeowner’s insurance is a necessity. Purchasing one can help you lessen the burden of financial costs when accidents or certain occurrences happen. Protect your property and personal belongings now and talk to an insurance agent. They can help you find the right coverage for your belongings and guide you throughout the whole process. Contact a local insurance agent today. 


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By Cary Grant

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