Home owner’s insurance can mean different things to different people depending on the type of policy that is in effect. The two things that all policies do, or at least should do, are protect the home in case of damages, and protect you from personal liability should someone be injured while on your property. This article will examine some of the issues concerning home owner’s insurance and perhaps answer some questions you may have on the subject.
When it comes to asset protection, how much insurance do you really need? That is a question that many home owners ask. With home owner’s insurance it should be remembered that the more coverage you have the less money you will have to pay out of your own pocket should something happen. You should spend some serious time calculating how much cash you would have if you needed to make repairs and then adjust the level of coverage to that.
You should also ensure that you have enough coverage to handle any personal injury claims that may come your way. If you are not sure about how to do this, sit down with your home owner’s insurance agent and have him or her go through the numbers with you.
In most cases where there is a mortgage outstanding, the lender will want you to have at least enough coverage to cover the remainder of the mortgage. However, do not let this minimize the coverage that you feel you really need. In other words, if you need more insurance than what the lender requires, then get it. You will sleep easier.
There are some issues that affect the price of home owner’s insurance as well. For example, brick homes are usually less expensive to insure than frame (wood) homes. Older homes, especially those in disrepair, may cost substantially more to insure than newer homes. Some newer homes may qualify for discounts and you should ask about that if you are building or moving into a new home. These discounts can add up fast and save you a lot of money.
There are some common (or basic) types of coverage that most homes need. These include property damage, living expenses, medical payments, personal liability to name a few. You want to get as much coverage as you can for the money you are spending.
If you live in a flood prone area, you will want to ask about additional flood insurance. Do not assume that your basic home owner’s policy has flood insurance. Chances are very good that it does not.
Home owner’s insurance is there to protect you, to protect the lender, and to protect anyone who may be visiting with you in the event they are injured. It is one of the most important forms of insurance that a consumer will buy. The type of policy and the riders associated with the policy should be reviewed and chosen with care. You do not want to find out later that your home is not covered for something that you assumed it was covered for. When a mortgage is paid and there are no liens on a home, home owner’s insurance is not mandatory, but home owners should consider carrying it anyway because the cost of having it is far less than the cost of replacing a home and everything within the home out-of-pocket.
Peter Kenny is a writer for The Thrifty Scot, please visit us at Home Insurance and Compare Loans
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