The Ultimate Guide to Homeowners Insurance

Your beloved home needs a homeowners insurance policy, which will give you the peace of mind that the asset you’ve invested in the most is in good hands. It’s also important especially in the face of natural or manmade disasters that we cannot control or foresee such as storms, typhoons, fire or even theft and vandalism that may damage or destroy our homes.

Homeowners insurance will protect you against any financial worries in rebuilding or repairing your home in case of the unfortunate events by providing property coverage against structural damages and personal property.

Below are more benefits of getting a homeowners insurance for your home:

• Most policies include the costs of staying elsewhere while your house is being repaired.
• Some personal injuries and/or accidental death inside your property may be covered by your homeowners insurance policy.
• It satisfies the requirements of a bank where you intend to secure a mortgage.
• There are different home insurance policies to choose from with various riders that will suit your needs.

As you can see, getting your home insured is very important. That’s why no wise homeowner chooses to ignore getting a good home insurance from their trusted insurance company.

But most people still fail to get the right insurance that meets their needs. Choosing what is right for you, your needs, and budget may seem like an overwhelming task. Don’t worry, we’ve got your back. Below are more useful tips for wise homeowners like you!

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What You Should Prior to Insuring Your Home

One of the factors that insurance companies take into consideration is the location of your home. Any greater risks of floods or land movement such as earthquakes and landslides in your area will definitely affect the insurance premium you have to pay for each month. Also, expect that your interior and exterior will be checked for possible risks.

Before securing a homeowners insurance, have your property assessed and ask for quotations from several insurance brokers and agencies. If several home improvement projects are needed, make sure to look for the best contractors to handle repairs or renovations.

Compare each policy against the other and check if the premiums are commensurate with the benefits you will receive when the time comes for you to claim against your insurance policy.

Understanding the Different Types of Coverage

There are different insurance companies all vying for your business. It’s important to note that not all policies are made the same. As premiums vary according to the benefits you may derive from them — including the other riders that you may want to include.

Of course, there are always basic home insurance policies that are friendly in the pocket but may not provide you the amount of coverage you seek or need.  Below are the common kinds of home insurance coverage:

• Cash Value after Depreciation

This typically covers the value of the house and your personal belongings less the depreciation or current value. This means that your home and belongings are assessed according to how much they are now and not when you bought them.

• Replacement Value

This would refer to the current actual value without any depreciation costs. With this kind of coverage, repairing or rebuilding your home to how it was originally valued prior the event or disaster that destroyed it is the what is done after the claim has been made.

• Guaranteed or extended Replacement Cost.

This is the most comprehensive type that is inflation resistant. This kind of coverage guarantees  the cost of rebuilding or repairing your home even beyond your policy limit but with a ceiling of around 20-25% over the limit

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All About Premiums

With the homeowners insurance coverage options, you will also have varying annual premiums for each depending on which you choose. Your decision as to which offer to grab will greatly depend on the assessed value of your home and its contents and your perceived worth of these.

A great factor that affects the premium that you have to pay for is the location of your home like whether there are waterways that make the area susceptible to flooding, the prevailing crime rates, susceptibility to  earthquakes, etc. This will mostly result in higher premiums because of the risks involved.

However, you may lower the cost of the premiums you would have to pay if you take certain steps to decrease the risks involved.

• You may install security cameras, additional locks and alarms to discourage theft.
• You may also install smoke detectors and have fire extinguishers on hand to fight fires or detect smoke to prevent or avoid fires.
• Setting up your fire alarm or burglar alarm hooked to the local police station will also be beneficial

Ask your agent for any specific requirements or options that may help decrease your annual premiums and see if you can comply with these.

Choosing the Right Insurance Company

It’s always wise to check on the legitimacy and credentials of the insurance company you are considering even if the offer made is too hard to resist. You may check with the state insurance department or consumer agencies to get to know the company better.

Get referrals from friends who have first-hand experience with the insurance company you are considering. Check out their websites, track records, and reviews to make sure they are legitimate before signing the home insurance policy.

More things to check out are how they deal with claims, how fast they process these, and how efficient they are in handling these. Nothing compares to track records of payments for claims and consumer feedbacks!

Taking Care of Your Homeowners Insurance Coverage

Now that you have studied what insurance policy would best suit you and your needs, it’s best to sign up right away — you may never know when you’ll be needing your home insurance. It is always wise to be prepared!

1. Review your home insurance well and ensure that everything that was discussed is included in the final draft prior signing on the dotted line.
2. Don’t forget to keep a copy of the policy with you at home and the original tucked away in a safe or safety deposit box.
3. Take a tab on its expiration date and constantly update any additional improvements or home inventory to ensure that you remain covered.
4. Pay your premiums on time and do not let the policy lapse.

It pays to be prepared for any event or casualty and protecting your precious home is one sure way to ensure that no matter what disaster may strike, you will still have a roof over your heads once everything has settled.

Make sure to get a homeowners insurance policy that fits your needs as soon as possible!

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Written by Tyler Plack. April 14, 2016

Tyler Plack is a licensed loan officer (NMLS# 1652645). He holds experience originating loans under many different programs. Tyler is local to the Annapolis area, and he loves spending time on the water, with his dogs, cooking new foods, and traveling.