There’s no doubt the housing market is hot with houses selling fast and lots of buyers and sellers moving and taking up a new residence. In fact, the average home is on the market for a mere 15 days before being sold. Whether you are a first-time homeowner, or have just moved from one home to another, a new home brings with it many decisions. One of those important decisions is your home insurance policy coverage. Home insurance policies can be an expensive and necessary evil to homeownership. Are you wondering what to look for in a home insurance policy? Read on to learn more about what standard coverage provides and what you need to protect your home.
Homeowner’s Policy Coverage
When you get your home insurance policy quotes, you of course will immediately look at the cost. But you also want to take time to look at the coverage. What exactly is the coverage provided in the policy? It’s important to know that you, your house, and your belongings would have coverage in the event of an emergency.
Most homeowner’s policies include several types of coverage you should be aware of.
Dwelling coverage protects the actual structure of your home. It includes:
- Built-in appliances
It also includes any attached structures including, for example, garages as long as they’re attached to the main structure of the house.
It protects your home from things like fire, hail, theft, and vandalism. If your home suffered damage from any of these causes, it would have coverage to get fixed.
Contents coverage helps to cover your personal belongings and furniture in the event they’re damaged from one of the causes listed above. If you love any of these, the contents coverage would give you cash to replace the items.
While the previous two kinds of coverage take care of property and belongings, personal liability insurance covers people. If you or someone you know is visiting your home and experiences an injury, then they would have bodily injury damage coverage.
Additional Living Expenses
Not all policies automatically come with additional living expenses coverage, but it’s important coverage to have in the event of an emergency to your home.
Let’s say you have a fire in your home that forces you out of the home. The additional living expenses coverage would help to cover rent, hotel room, restaurant meals, and other incidental costs because you’re unable to be in your home.
Most coverage requires the insurer to put you up in accommodations similar to what you lived in. So, if you have a lakefront home, the insurance company would need to pay for a lakefront rental.
Be careful though, most insurers will still have limits for what you’re allowed to spend daily.
Once you have the basic coverage, you should know that there are several optional types of coverage to consider on your policy. You might consider where you live and your own potential susceptibility to certain dangers for your home. Then you can decide which of these added options you should include in your policy.
Let’s take a closer look at some of these options.
Other Structures Coverage
You might recall that the dwelling insurance only covers your home and anything attached to it. So, if your garage, for example, is detached, then it wouldn’t be covered under the dwelling coverage. It would need separate other structures coverage.
This is true for any other structures around your home or on your property. They will not be covered if they are detached from the home and need their own rider on your policy.
It should be noted, they also typically come with a separate deductible too.
Not all homes probably need flood insurance. But you might live in a place where you know your home might be more prone to flooding. If that’s the case, you definitely want to add this to your coverage.
Without specific flood insurance, if you have water flooding issues, your regular policy will not cover damages.
Flood insurance will cover damage to your home and belongings as a result of flooding. This policy also comes with its own separate deductible.
Like flood insurance, you need to have earthquake coverage to be protected from the damage caused by an earthquake. Not all parts of the country need this coverage, but if you live in an area prone to earthquakes, you want to add it. Like the previous two types, it also comes with its own deductible.
Because your coverage will have limits, you might also want to consider getting valuables coverage if you own something of high value. This might include an art collection or a jewelry collection. Most regular policies have limits on content coverage. So, if you have items that have an extra high value, you want to add specialized coverage for them.
Types of Coverage
When you obtain your homeowner’s policy you will also need to decide on a level of coverage. This is particularly important if you ever really need to make a claim.
Actual cash value coverage means you have coverage for your dwelling and your belongings at their current cash value. This means the item is covered for what it’s worth minus depreciation. If you have a five-year-old refrigerator and it’s damaged and ruined, with this policy you would be given enough money for what it would cost to buy a five-year-old fridge, not a new one.
Replacement cost coverage is what most people want to have. It covers the actual cash value of your home and possessions without the deduction for depreciation.
Finally, there is a guaranteed (or extended) replacement cost. This is the best coverage to get because it covers the actual cash value and then some. It allows for the fact that things might cost more than when you originally bought them.
What Happens When Insurance Won’t Pay?
You get insurance so you know your home and possessions will have protection if something terrible happens. You might even assume the insurance company will play fair and pay you what you’re due.
However, many people find when they experience property damage, it can be difficult to get the insurer to provide a fair payout. It might be necessary to hire an attorney who knows how to handle the insurance company and gets you the coverage payouts you deserve.
Home Insurance Policies for Your Needs
Your home insurance policies help protect your home and belongings if something happens to your home. Nobody expects those terrible things to happen to them. When they do, you want to be prepared with the right coverage.
If you need help navigating the insurance company, we are here for you. Contact us today for a free review of your case.