There are many decisions to make when you buy a home, and your insurance coverage is one of the most important. Most mortgage lenders require homeowners insurance to protect their interests, and you need it to protect yours. If you are unfamiliar with this coverage, there are a few things that you should consider as you select your policy.
Understand Your Homeowners Policy Limitations
One common mistake that home buyers make is overlooking policy exclusions. Certain threats, such as flood damage and some natural disasters, require additional coverage lines for full protection. Review the policy exclusions, and add any necessary riders for risks such as flood damage and earthquakes.
Any outbuildings on your property need coverage as well. Some home insurance policies extend coverage for additional structures on the property, while others require a secondary rider. Whether you have a detached garage, barn, or storage shed on your property, make sure your home coverage includes it.
Ask About Guaranteed Replacement Cost
Your home insurance coverage includes specific methods for calculating replacement costs. Some situations can trigger a change in the local market, affecting the cost of rebuilding your home. With a home policy that includes guaranteed replacement cost coverage, your home policy will cover that increased cost so that you can rebuild your home without increased out-of-pocket expenses.
Calculate Your Personal Possession Value Carefully
Homeowners insurance coverage includes personal property coverage for your possessions. The value of this coverage depends on your selection when you obtain the policy. Take time to thoroughly inventory your home, estimating values room-by-room. Any items you have with significant value, such as expensive jewelry or fine art, should have a separate policy endorsement to cover that particular item. Hence, you get full reimbursement for its value if something happens.
Assess Your Liability Exposure
Another benefit to homeowners coverage is liability protection. If someone suffers an injury on your property, your home policy’s liability coverage will cover those costs. This applies whether they suffer a dog bite, a trampoline injury, or even a slip-and-fall injury on your walkway.
Consider the hazards on your property, including anything that might attract a curious child, such as a swimming pool, tree fort, deer stands, streams or ponds. Discuss any pets with your carrier, especially if you have a dog. If you have a home, it is usually wise to carry additional liability coverage known as an umbrella, especially if your property or lifestyle increases your liability risks.
Choose the Right Homeowners Insurance Deductible
Some insurance carriers set your home insurance deductible higher for your policy’s first year or two, only allowing you to reduce that deductible after establishing a claim-free period. Consider the deductible that fits your budget because you will have to pay that amount in case of a covered loss. Carriers are starting to offer larger discounts for larger deductibles. Insurance should be for the catastrophic loss that you cannot afford, not for small relatively minor claims, so carrying a higher deductible often makes good sense in today’s environment.
These are a few essential tips for finding the best homeowners insurance. Consider these factors and discuss your personal needs with your carrier to get the homeowner’s insurance policy that fits your home, risks, and preferences.
Contact a Brooks, Todd & McNeil Agent Today!
If you’re looking to review you current homeowners insurance policy or get a new one, a dedicated independent insurance agent at Brooks, Todd & McNeil can help. Our team can identify whether your current insurance coverage program is covering all of your exposures, assets and insurance needs.
Whether you’re looking for homeowners insurance, car insurance or any other insurance policies (life, health, business, umbrella, renters insurance, Medicare and more!), we can help. As an independent insurance agency, we will compare policies from multiple carriers (we work with 87!) to customize an insurance program that meets your current needs, and as life circumstances change (i.e. a new home, new car, growing family, starting a business), we will assess your emerging exposures and recommend coverage to protect you accordingly. To learn more about our products and services, contact us today at (800) 448-4567.