For a lot of people, home insurance is just an extra thing you have to buy when you’re buying your house—it makes sense to have it, but you don’t really have time to learn the ins and outs of what exactly it covers and what isn’t covered. Fortunately, with these six facts about home insurance, you’ll be able to get the right coverage at the right price in no time at all!
Home insurance protects you from costs related to damage
Whether it’s a fire, theft, or even vandalism, your home insurance coverage is designed to pay for costs related to damages. However, there are two types of coverage options: Actual Cash Value and Replacement Cost. These two coverages define how much money you will get back from damages. To find out more about these types of coverages, read on.
Home insurance protects you in case of theft
If your home is broken into, your belongings stolen or damaged by fire, water or storms, and even if someone is injured in your home, home insurance will cover you. Before buying coverage for any of these events, however, it’s important to make sure you have enough liability coverage to protect yourself from potential lawsuits. A good rule of thumb is having at least $300,000 worth of liability protection; a standard homeowners policy has a $100,000 limit on personal injury protection. Ask your agent how much coverage you need based on what would happen in a disaster scenario like one described above.
Home insurance can cover unforeseen circumstances
When you’re buying a home, you may be covered for natural disasters like earthquakes or floods, or other circumstances like theft or vandalism. Talk to your local agent to see what kind of coverage you need based on your specific needs and location. You can also check out some of these helpful guides on home insurance. Don’t forget renters: Did you know that if you live in an apartment building or are renting your home, in most cases (unless it’s co-owned), then there is usually not flood/storm damage insurance already included in your rent? If there is a severe storm event, then a lot of people suffer massive losses when they have no way to recoup those costs without getting an additional policy through their homeowner’s carrier.
There are many types of home insurance
There are several different types of home insurance, each addressing a particular type of risk. For example, a standard homeowners policy may protect against theft and damage to your house and personal belongings while providing liability coverage in case you injure someone while in your home. Renters insurance may also protect your belongings but will focus on things like living expenses if you’re forced to leave your home due to a fire or other disaster that destroys it.
Home insurance is based on your needs
Don’t get home insurance based on what you think your house might be worth or what other people are paying. These factors don’t matter to insurers; you have to find coverage that fits your specific needs. For example, if you live in an area with lots of tornadoes, flood insurance is a must—but if such events are rare in your area, it might not be worth paying for. The same is true for hurricane and earthquake coverage.
Choose a reputable insurer
This is probably where you’ll spend most of your time and effort—and it’s definitely a very important consideration. First, consider what type of coverage you want to purchase. There are five main types: HO1, HO2, HO3, HO4 and HO5. Choose which coverage works best for your home by considering factors such as its age, location and value.