Homeowners Insurance: An Overview
No homeowner likes to think about having damage to their home from natural disasters, theft, or fire. But it pays to be wise and buy a home insurance policy that provides protection to your home in the event of any mishap. Homeowners insurance combines protection in two different ways. It insures against hazards and liability.
Home insurance should be considered an investment in the security of your home, just like your health insurance policy in an investment in your physical well-being. Homeowners with a mortgage are required to take out home insurance by their mortgagee. There are two areas, hazard and liability.
Hazard Insurance covers:
- unintentional damage to your home and its contents caused by fire, storm, theft and vandalism
- the cash value (the worth at that point in time) or replacement value
- (fully replaces what is damaged)
- Special Property Coverage: Cash, jewelry and other precious items will not be covered by your home insurance so ensure that you get a supplemental policy. Equipment linked to a home office also needs special coverage.
Note: in areas where flooding or earthquakes are common your lender will require extra insurance
Liability Insurance covers:
- personal liability for any accidents on your property after which a visitor might need medical treatment
What factors affect your insurance premiums?
- older homes and certain building materials often cost more to insure
- your home’s location
- fire extinguishers, burglar alarms etc, expect a reduction
- credit record or being a smoker
- the number of claims you have made
Don’t forget to provide your insurer with a complete and up- to- date inventory to ensure that claims are settled faster.
I am not a licensed insurance agent, but I do have excellent referrals. Get in touch, I’m happy to answer all your home buying or selling questions.