Homeowners Insurance And What You Need To Know
Of course, you want to protect your home. So, it’s only natural that we all turn to homeowner’s insurance to protect our largest investment. When, and if, disaster strikes you want to be prepared and know that you have enough coverage to protect yourself and your valuables.
Here are the Top 9 Things That You Need to Know About Homeowners Insurance:
1. Understand what is covered. The ‘normal’ homeowners insurance policy covers your property and possessions in the event of a fire, storm, vandalism or theft. It also provides liability coverage should someone get hurt on your property and take actions against you to sue. In addition, it also protects the outside belongings of your home and some policies will go as far as covering your valuables when they are traveling with you. Such as a computer or jewelry being lost or stolen.
2. Find out what you can do to reduce premiums. Most insurance companies offer discounts based on certain factors added to your home. For instance, a deadbolt can take 5% off your annual premium on average. A burglar alarm can further discount your premium. The amount of risk foreseen is how insurance companies price your policy. So, the less foreseen risk, the lower your policy will be.
3. Replacement cost versus market value. As a homeowner, you should recognize the difference between “replacement cost” versus “market value.” Basically, replacement cost is what it would cost to repair or replace your entire home whereas the market value is dictated by how much someone would pay to purchase your home and accompanying land in its current state.
4. Know the timeline for filing a claim. It’s important to understand the time restraints for reporting a claim as by waiting too long to file you may not be eligible for the benefits. On average, the timeline is 14 days for reporting. But always check with your homeowner’s insurance provider to know what the timelines are for your specific policy.
5. Document everything. Just because you have homeowner’s insurance doesn’t mean that when you file a claim it will get paid. Make sure to document everything by keeping a record of phone calls, photos and other important dates/events. In addition, all receipts, estimates, contracts and the like should also be kept in an orderly fashion to provide to your insurance company representative.
6. Bundle and save. Most insurance companies will offer a discount if you carry automobile (or other types of insurance) and homeowners insurance with them.
7. Filing a claim. While you don’t want to cry wolf every time a large, expensive repair comes up on your home, it is always good to check with your insurance agent before paying for repairs on your own. For instance, if a bad storm damaged your roof your insurance may help pay for the cost of repairs.
8. Protecting your jewels. While most homeowners insurance policies have a default coverage for jewelry, many homeowners elect to add additional insurance coverage to make sure that it is fully covered. An appraisal is usually conducted by a certified jeweler and your jewelry items are documented for the additional coverage.
9. Shop around for the best deal. Don’t just take the first policy quoted to you as different insurance companies will offer different policies. To this end, the same coverage may cost more with one company than another when all of the other elements on the quote remain the same. Don’t just select a policy based on the lowest cost as the right agent can make all of the difference.
Choosing the right insurance company and the proper coverage is an extremely important part of being a homeowner. Most mortgage companies won’t issue a loan until proper insurance coverage is provided and the insurance policy must remain intact over the life of the loan. While homeowner’s insurance is just another added expense of being a homeowner, it can provide an invaluable sense of security to know that your home and valuables are covered in case of disaster.
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