Homeowners Insurance

Homeowners Insurance

Owning a home is a huge investment. It’s the most expensive thing most people will ever own. So when purchasing insurance for your home, make sure you have enough homeowners insurance to cover the price of the home. The insurance might not cover extremely valuable items within the home, so it is important to ask about riders.

A rider is an add-on. You add it to your basic home policy, and it offers extra benefits in exchange for higher payments.

The Facts

Insurance for your home is the same as having car insurance for your car. You pay a monthly premium, and the insurance company provides financial help when you file a claim. If you cease to pay, then the policy will lapse.

Make sure to buy the best policy for your situation. Most homeowner’s policies do not cover floods or hurricanes. So if you live in an area prone to floods or hurricanes, you will certainly need flood insurance. You may be required to have homeowners insurance if you have a mortgage. But even if you own the property free and clear, it’s still good to have insurance.

A traditional homeowner’s policy is based on form HO-3 from the International Risk Management Institute. The policy typically offers protection from fire, theft, hail, wind, riots, sleet, aircraft, snow, vehicles, falling objects and smoke. However, you need to speak with the insurance agent to be certain of the coverage you’re getting.

Guaranteed replacement cost and actual cash value policies are two common types of policy. People generally prefer guaranteed replacement cost rather than an actual cash value policy. If you have guaranteed replacement cost and the home was purchased at $125,000 but now costs $175,000 to rebuild, you would receive only $125,000.

The loss of a home after a catastrophic event, lost personal items after a burglary, or a mysterious disappearance of a valuable item are the major benefits of homeowner insurance. Without homeowner insurance, it is possible to lose everything in a fire or tragic event.

You need insurance for your home. Otherwise, you run the risk of losing your home following a catastrophe. Speak with an insurance agent to learn about your options.