Homeowners Insurance: Do You Have The Right Type and the Correct Amount?

Most people don’t know how much insurance coverage they need for their home. It’s always a good idea to investigate and make sure you have the amount of coverage you need in the event of an emergency. Homeowners insurance is good to have because it protects one of the most valuable investments you will ever have and that is your home. Insurance can also go along way towards protecting you in other situations. If someone decides to bring legal action against for damages or some type of injury you may have caused or been accused of causing.

Get all the information so that you will have the right type of insurance just in case there is some type of loss. Your homeowners’ insurance policy will not only cover your home but your prized possessions within your home, or as they are known on the policy, the contents. For renters, there are different types of policies that will cover just the things inside of your rental unit.

If you are in the market for affordable homeowners insurance you are going to find that most policies are sold by agents and these agents can sell for just one insurance company or many. Sometimes you can actually get the different insurance companies to present bids and doing so will allow you to get the best rates or lowest premiums available. During these tough economic times, when you need to save as much money as possible, that’s not a bad idea.

Even if you get the lowest bid possible for your own protection always get some information about the insurance company that you are dealing with. Some things to consider are, do they always pay their claims and are they paid on time. Are there any types of bad reports with the Better Business Bureau? How is their customer service department? Do the representatives seem friendly and courteously?

The type of policy you receive will determine exactly what’s covered and what is not covered. It should be clearly outlined in detail regarding the coverage. Your policy should explain what types of hazards are covered in addition to how you are compensated in the event of a loss. If you get just the standard policy the amount of protection you receive will be very limited in terms of the perils. It may state that you are covered for fire or theft, or even burglary.

If you get a policy beyond the standard, you coverage will be a little wider in scope and you will for the most part be covered from all types of losses with the exception of those items specifically mentioned in your policy.

If you have a lot of valuables like rare coins, collectibles, art, imported wines, and these types of things you would be wise to get the special insurance. This type of insurance is geared towards insuring the aforementioned items and of course you will have to pay a separate premium.

You will be hard pressed to find any insurance policy that will cover things like police actions, nuclear explosions, riots, losses as the result of a war, or acts of God. Now there are some additions that can be added to a policy and these are called riders. Riders will cover certain situations that an insurance policy will normally omit from protection, such as an earthquake or a flood and things of this nature. Of course with a rider added to your policy you will be required to pay another premium based on these additional coverage’s.

Your policy should include liability coverage which will protect you if someone initiates legal action against you because you caused property damage or injury to someone.

If you have any type of insurance whether it be auto, homeowners, aircraft or whatever the situation may be you will have a deductible. A deductible is the amount that you have to pay if you file a claim before the insurance company will pay. The more you have for a deductible the less your insurance premiums will be. The amount of your deductible can vary from $250 all the way up to $2500. Let’s look at an example. If you file a claim for damages done to your home and the damages amount to $1,500 and your deductible is $250. You will be required to pay the $250 and the insurance company will pay $1,250, which is the difference between the total claim of $1,500 and your deductible.

The amount of coverage you will need is normally about 80% of the value to replace your home or what it would cost to build your home again from the ground at today’s market values. To be on the safe side always insure your home for the entire replacement value.

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