Homeowners Insurance Coverage
Homeowners insurance coverage protects the structure of your home in the event that something happens, it also protects your belongings, and helps with living expenses. It also provides liability insurance should someone outside of your family get injured on your property. Homeowners insurance coverage is not required by law, but most lenders will require that you purchase minimum coverage for the cost of your home before they will approve your loan.
Homeowners Insurance Coverage:
How Much Do I Need?
That depends. In the event of the worst do you want to be able to just pay off what the house is worth, or do you want to be able to rebuild? Due to many things including changes in building codes, the age of your house, and inflation the cost of rebuilding will probably be more than the actual cash value of your house.
The same goes for replacing personal belongings. Do you want to ensure everything for actual cash value or replacement costs? Consider your computer equipment. That top of the line gaming computer you bought a year and a half ago may have cost $2,000 when you purchased it, but since technology changes so quickly, it may only be worth half that now. $1,000 may not get you a computer even close to what you had.
You will also need to see if you need any special riders to cover things like:
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jewelry
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special collections like coins
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baseball cards
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or furs
Don’t forget to take into account things like the cost to replace every day items like clothing, your CD collection or books.
The best way to decide how much you will need is to do a full inventory of your house, room by room, documenting every item in every room and its cost. Record not only what it is worth but what it would cost to replace it.
What Does Homeowners
Insurance Coverage Cover?
Basic homeowners insurance policies cover against:
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Theft
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Vandalism
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Natural disasters including volcanic eruption, fire, lightening, windstorm, and hail
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Explosions
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Riots or civil disturbances
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Vehicles and aircraft
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Smoke damage
Extended policies can be purchased to cover:
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Electrical damage/fire caused by an appliance
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Freezing of pipes
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Roof damage due to the weight of snow or ice
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Falling objects
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Flooding caused by a plumbing problem
Other coverage can be purchased by a special rider depending on where you live. Depending on where you live, damage from flooding, hurricane or tornado is covered under FEMA and you will need to check with your insurance agent.
How Much Will Homeowners
Insurance Coverage Cost?
Many things will determine your premium on your home insurance. Among them are:
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Square footage of your home
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The building materials of the house
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Do you have a dog with a bite history or a dog that is considered high risk for biting such as a Pit Bull or Doberman? You may need to get a special rider for high risk dog breeds or it could exclude you from dog bite coverage in your policy. Remember, you are legally responsible for any medical bills incurred by a dog bite or if your dog kills a neighbor’s pet. Your homeowners insurance will cover these things as long as your dog does not have a history of aggressiveness.
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The building costs in your area
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How far your home is from the local fire department and the nearest fire hydrant
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The local crime rate
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The age of the home and the condition of the electrical, plumbing and heating systems
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The likelihood of natural disasters in your area
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Do you own a pool?
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Your credit rating
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Are you purchasing only the minimum coverage your lender wants you to have, or are you looking to purchase a full comprehensive package?
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What is the history of the property? Take a look at both the Home Disclosure Report and the Comprehensive Loss Underwriting Exchange (CLUE) report prior to purchasing the home. Both will give you an idea of what kind of problems the property has had in the past and will let you know what claims have been filed previously.
Shopping For Home
Insurance Coverage
You don’t want to go with the first quote that you are provided. You are going to want to shop around to find the best deal on insurance. Here are a few more tips to help you find a homeowners insurance company that you will be happy with.
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Ask your friends and family for referrals. There is no better advertisement than word of mouth. These are the people who will help you learn what the company’s reputation is for paying out claims and how easy their customer service department is to work with when you have to work with them.
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You should look for an insurance company that can and will customize a policy to meet your needs. Not all insurance companies offer the same services. Shop around until you find what you want.
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Some companies offer discounts that others do not. Shop around to find the best price and discounts. For example, some companies will give a 10% discount to senior citizens, will lower rates if no one in the home smokes, or offer discounts if you have all your polices through them (auto insurance, homeowners insurance, life insurance)
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Find out how long the company has been in business and its financial rating (this can be learned through A.M. Best). Approach any company with a rating below B+ with some caution. Any company with a history of management problems runs the risk of going out of business.
Find Homeowners Insurance
Coverage Today!
Start your search for homeowners insurance coverage using our easy to use tool at the top of the page. It will allow you to compare policies from the top homeowners insurance companies side by side. Find the homeowners insurance coverage you need today!