Buying a home and, arguably, choosing the right homeowners’ insurance plan are two of the most important financial decisions that many will ever make. This kind of insurance can be your financial lifesaver in the case of anything from common accidents to a dog bite. Many yet are unsure of how and where to start in finding the best policy for them. Read on to learn some of the basics of these plans and also what is covered by them.
It is important to keep in mind that these insurance policies are not focused on damage caused to the property but rather to structures that are on it. For example, if one purchased a home for $300,000, then this price is usually derived by both the value of the home itself and the land value. (As a result, you won’t likely need that dollar value of coverage to cover the home.) Home insurance starts with covering damage that can occur to both the interior and the exterior of the home as a result of such events as a fire or an act of vandalism. The vast majority of the basic homeowner policies will not cover damage from earthquakes or floods however, though riders (added coverage) can sometimes be added or additional policies, such as earthquake insurance, can be bought.
Besides the actual building being protected, this kind of coverage can assist you in replacing personal belongings that were damaged in your home or that were vandalized or stolen. The litany of items generally includes electronics like flat screen TVs, appliances, one’s wardrobe and furniture. For those who might have valuable collectibles, like jewelry or firearms, or expensive art, it is vital to be mindful of including these things in the policy coverage. Should the value of these items be unusually large, separate riders may likely need to be added to provide more protection.
And last, but certainly not least, home insurance could prove to be an absolute necessity if any serious injuries and ensuing legal action were to take place. A homeowners’ insurance policy provides financial protection for you and your family should someone be injured on your property and includes animal bites, which is perhaps one of the top unfortunate events that likely will kick this kind of insurance into action. Personal liability is the type of coverage that can help one pay both legal and medical bills.
There are basically three levels of coverage that homeowners are presented with to choose for their situation and these are:
• Actual Cash Value
• Replacement Cost
• Guaranteed Replacement Cost.
Actual cash value policies cover damages to your home and covered personal items, less depreciation. Replacement cost policies are what cover rebuilding and replacement costs without depreciation being considered. The most comprehensive plan is the replacement cost policy, which actually will pay out up to 25% over the original cost of your home and for the replacement of your belongings.
Whatever your needs, there is a plan for you. Call us today to start a conversation.