Do you need home insurance?
Homeowners need content insurance to protect their homes and personal belongings. Renters need insurance to cover their furniture and other personal belongings. Everyone needs liability protection in an accident that injures others or damages their property.
Decide how much coverage you need.
The better the cover, the less you will have to pay out of your pocket in the event of an accident. In some cases, your lender will decide how much cover you need and may require you to take out insurance to cover at least the amount you borrowed for your mortgage. It’s important to remember that the cover you buy for your home, its contents, and your personal belongings will affect the price you pay.
Compare the excess
The excess is the amount you have to pay out of your pocket for each claim and applies only to cover your home and personal belongings. When choosing an insurance policy, make sure you feel comfortable paying the excess if you have a claim. Keep in mind that insurance with a $100 deductible costs more than insurance with a
$250 deductible. Higher deductibles are available at a lower price.
Replacement cost or actual cash value?
You can ensure your home and belongings at either replacement cost or actual cash value.Substitution cost is the sum expected to supplant or reconstruct the home or fix harm with materials of a similar kind and quality without devaluation. Ensuring your home for at least 80% of its replacement value is essential. The actual cash value is the amount needed to repair or replace the damage to your home after depreciation.
Shop before you buy
You don’t have to buy insurance from the company your lender recommends. There are many creative ways to determine how much different insurance companies charge for the same products and services. This includes your state’s insurance department, consumer publications, and the public library.
Ask your agent about discounts.
In some states, insurance companies offer lower rates like insuring your home and car with the same company, installing deadbolts or alarm systems, or replacing your roof.
Basic coverages available
Whether you’re a homeowner or renter, different home insurance packages are available to protect your home and belongings. Each box protects against several incidents that cause property damage. Three examples are fire, storm, and theft. In addition, each package usually includes four additional types of coverage: property damage, extra living expenses, liability, and medical expenses.
Where can you shop?
Check newspapers and the yellow pages of your phone book to find companies and agents in your area. Also, ask neighbors, family, and friends for recommendations of insurance companies and agents. Don’t forget to shop around to get the best price and service.
Read your policy carefully.
You should know that home insurance is a legal contract. It is written so that your rights and responsibilities and those of the insurer are spelled out. When you buy home insurance, you get a policy. You should read this policy and make sure you understand its contents. Keep the policy in a safe place and know the name of your insurer.
Review your home insurance needs every year
Contact your insurance agent at least once a year to ensure your policy covers enough. Adding a room, new insulation, or renovations increases your home’s value and can increase replacement costs.