Homeowners Insurance is designed to protect your home and personal property and is required by mortgage lenders.
When buying a Homeowners Insurance policy, ask questions about covered losses and deductibles. Understand what exclusions are (losses not covered) and what requires additional premium payments (endorsements) to extend coverage beyond the basic policy limits. Flood and Earthquake coverage, for instance, must be purchased as a separate policy or endorsement.
Different Types of Coverage
Most homeowners policies include the following:
• Dwelling coverage – the structure of your home and anything attached to it, including all permanently installed systems like plumbing, electrical, heating and air ducts.
• Other Structures – such as fences, detached garages, sheds and any other structure not attached to your home that is on your property.
• Personal Property – covers your possessions inside your home, like furniture, appliances and clothing. These are insured both on and off the property, such as when you are traveling.
• Loss of Use – covers any additional expenses should you have to stay somewhere else while your home is repaired.
• Personal Liability – covers you when you are sued for injuries or damages by someone who is injured while on your property.
Two ways of being reimbursed for property losses are called Replacement Value, paying you the amount your property costs to replace brand new, and Actual Value in which property is depreciated to value at the time of the loss. The right policy will return your home and personal property to where it was before the damage occurred, so weigh your options carefully.
For most of us, our home represents our largest investment. While many things inside it are irreplaceable, it just makes sense to protect what we can. A good homeowners policy can mean peace of mind, and a good night’s sleep!