Having a home insurance policy undoubtedly gives you a feeling of security, which is entirely appropriate. However, it’s important to make sure the secure feeling you’re enjoying is based…
If you are about to buy a home, one of your considerations needs to be homeowner's insurance. If you are getting a mortgage for your home, the financing company will require you to carry insurance. Of course, even if you aren't financing the home, it's very wise to have insurance on your investment.
Want to know more about home insurance and what to look for in a home insurance policy? Check out this list of commonly asked questions and tips regarding homeowner's insurance.
Homeowner’s insurance is a type of insurance that covers the home itself, any outbuildings on the property and the contents of the home. In addition, it protects you, the homeowner, from losing a large sum of money if someone is injured on your property. The way homeowner’s insurance works is that if something happens to your property or on your property, you submit a claim to the insurance company and, after review, they will pay a certain amount of money to cover the loss.
It’s important to read your homeowner’s insurance policy carefully so you understand what is being covered because every policy is different. With that being said, most insurance policies cover damages and losses caused by theft, fire, wind, hail, and lightning. The home itself is covered, as are attached and non-attached structures like the garage, a shed, a barn and a workshop. Most policies also include some coverage for personal property. This means that if a computer is stolen or you lose your living room furniture in a fire, the insurance company will often pay to replace those items.
Every policy will have exclusions and items not covered. In addition, some policies don’t cover flooding or certain natural forces like earthquakes or hurricanes. If you live in an area prone to these forces, you might need to purchase additional insurance. If you have items such as jewelry, expensive electronics or furs, you also might need an additional rider to cover those items.
Most policies have a deductible; you would be responsible for paying that for each claim. In addition, if you have done something neglectful that resulted in the loss of property, your claim might be denied.
The price of homeowner’s insurance varies tremendously depending on where you live and how much your home is worth. The company will take into consideration the crime rate in your area, the property value and the cost to replace your belongings. One very general rule of thumb is to expect to pay approximately $35 per month per $100,000 of the home’s value. Again, this can vary widely depending on your location.
If you need to file a claim, there are certain steps you’ll need to follow. If the loss is the result of a crime, it’s important to file a police report. Then call your insurance company right away. They will send you forms to fill out; be sure to complete them promptly. If you need to make temporary repairs, be sure to photograph the damage before you do any of the work. An insurance adjuster will probably need to go to your house to assess the damage, so have a list of damages ready to show them so you don’t forget anything. From there, the insurance company’s agent will walk you through the process of providing any additional information required.
If you own your home outright, it is not required. If you have a mortgage, however, the financing company will probably require you to carry homeowner’s insurance. This is because they will want their interest protected in the case of fire or other disasters.
Need more help finding a policy? Here are some tips and tricks to use when shopping for a homeowner's insurance policy and what you should do to prepare for the application process to hopefully save a few dollars.