Whether you are a first-time homebuyer or have owned your home for decades, staying up to speed on home insurance coverage and changes is a wise choice. Making the right home insurance choice may be one of the most important decisions you will make.
But how can you correctly make such an important decision? What should you look for and consider? Answering these questions is important. Let us consider how to choose the right insurance coverage for your house.
A General Overview
Different types of insurance coverage have varying ranges for the amount that is covered and what is covered. However, there are some general elements to homeowners insurance coverage that must be discussed.
Homeowners insurance covers liabilities that occur at your home. For instance, if the UPS driver comes to drop a package off on your porch, but he slips and falls, he may be able to sue you over the situation. If he does so and wins the case, your homeowner’s insurance policy will likely cover such an instance.
Homeowner’s insurance policies also cover damage to the home. If someone throws a rock in your window or vandalizes your home while you are on vacation, the costs incurred to fix the damage would normally be covered. If your home was destroyed by a fire, you would also typically be reimbursed for the full value of your home.
The Particulars
However, not all homeowners insurance policies are created equal. Essentially, the old saying is true: “You get what you pay for.” But this does not mean that paying more is the better choice. There may be insurance coverage options that you are better off without. On the other hand, you might want to think about unique coverage options that are best for you depending on where you live.
For instance, if you live in an area that experiences many localized floods, you might want to consider riders for protection. Standard insurance plans often do not cover earthquakes. This is important to consider depending upon your geographical location in order to add coverage to your plan for such a situation. If you are living in an area with a high crime rate, you might want to protect your valuables through increased insurance coverage. If you are worried about the possibility of someone getting hurt at your place of residence, you could consider an umbrella policy which would increase your liability protection.
Situations such as those previously presented abound. It is important to recognize the standard coverage areas and what is important for you in particular.
Reducing Costs
In choosing a coverage plan, you will also want to be aware of what you may be able to do to reduce your rates. While there are many ways to do this, some examples include the following:
- Smoke detectors – You may be able to reduce your rates by placing smoke detectors in each room.
- Mortgage – If you are able, pay off your mortgage as fast as possible. Insurance companies typically give reduced rates to those who own their home.
- Shop around – Much like car insurance, it is also wise to shop around for homeowners insurance. After a few years with one company, you may be able to reduce your rates by switching to another.
