5 things you should know before purchasing homeowners
A home is likely to be your most valuable asset, providing you and your family with shelter and offering the opportunity to build equity and eventually sell at a profit. So you naturally want to make sure your investment is protected. This is where homeowners insurance comes into play. In the event of damage or loss, this policy will help you to repair your home and restore it to its former condition. Whether you’re the victim of break-in and robbery, a car crashes through your living room wall, or a fire breaks out, just for example, your homeowners insurance will cover the loss and pay for the return of your home. But before you jump into a policy, there are a few things you need to know. Here are some considerations to take into account.
1. Replacement cost vs. market value. You might think that the cost of your insurance policy is based on what you paid for your home or its current estimated market value. But this is not the case. Your homeowners insurance is intended to repair or replace your home, not your property. So there’s no reason you should pay to insure the value of the land your structure sits on. Before you seek a homeowners insurance policy, it’s a good idea to hire a building contractor to inspect your structure and provide an estimate of overall value. This will ensure that your house is protected in the event of damage or loss, while helping you to avoid overpaying for coverage you don’t need.
2. Coverage for damages. Before you sign on the dotted line, it’s best to understand what is covered by a standard policy. Although benefits will differ by provider and policy, you can generally expect to gain coverage for damages related to home invasion and theft, vandalism, fire, and some natural disasters or acts of god. Your belongings inside the home may also be eligible for coverage, depending on the policy you choose (although it is your duty to catalog these items).
3. Additional policies. You’ll find that there are several items not covered by your average homeowners insurance policy and you may want to pay to add extra coverage. Flood is rarely included in a standard policy, but you might not find it necessary, depending on the region you live in and the location of your home. You may also have to carry an extra policy for earthquake damage, again depending on where you live. And if you have extremely valuable items like jewelry, art, or collectibles in your home that exceed the value covered by your policy, you’ll want to inform your insurance provider in order to obtain adequate coverage.
4. Liability coverage. You may be liable for accidents and injuries occurring on your property, and your homeowners policy includes liability coverage to account for lawsuits pertaining to such instances. However, coverage is limited to a set dollar amount, which you can pay more to increase if you so choose.
5. Cost. Your home insurance is going to come at a cost, but it doesn’t have to break the bank. The provider, policy, coverage, and deductible you choose will all determine the price of your premiums, as will the value of your home. So speak to a representative at a reliable firm like Roman Financial Group to find out what your options are. This is the best way to get the coverage you need at a price you can afford.