Your mortgage lender will likely require that you carry homeowners insurance, and even if that’s not the case, you will still want some level of coverage. Home insurance covers things such as damage to the home itself, personal property inside the home, and injuries to visitors at your home as well as some other things.
Here are four criteria to look at to make sure you choose a home insurance policy that will actually protect you.
Dwelling insurance covers the physical structure of your home itself, as well as any attached structures like a garage.
It also refers to wiring, plumbing, and heating and cooling systems. When choosing a home insurance policy, you’ll want to research what is covered under dwelling coverage.
Damages that are usually covered here include fire and smoke damage, lightning strikes, vandalism and destruction, theft and burglary, and weather damage such as hail, snow, windstorms, sleet, or ice.
Personal Property Coverage
Just as important as dwelling coverage, personal property coverage is another point that you should research well when choosing a home insurance policy.
Personal property coverage covers the items inside your home, which can include furniture, electronics, clothing, appliances, jewelry, and other belongings.
You will want enough coverage to replace damaged or missing belongings if your home is damaged by flooding, fire, or natural disasters or if your home is burglarized and your belongings are stolen.
Most insurance policies will allow you to choose between reimbursement value (the actual amount it will take to replace items) or actual cash value (the amount the items are now worth after years of depreciation).
When deciding how much personal property coverage to get, you need to calculate how much you would need to replace everything important to you if you were to lose all your belongings at once.
Home Liability Insurance Coverage
This type of home insurance coverage ensures that you will be covered if visitors are injured on your property. Without this coverage, you may be held financially responsible for hospital bills and medical care, and you could be held legally responsible as well.
other valuable tips:
Home liability insurance coverage will cover a legal settlement as well as your legal fees. While everyone hopes that no one will be injured on their property, this is a case where it’s better to be safe than sorry.
How Much Coverage You Need
Choosing which type of coverage to get is not the only decision you’ll need to make. You’ll also need to choose how much coverage to get. It’s important to think about the worst-case scenario, such as your home being destroyed and you having to completely rebuild it.
The more coverage you have, the more expensive your policy will likely be, but you don’t want to be caught in a scenario where you can’t afford to rebuild or repair your home.
A home insurance policy is a big decision, and it’s important that you choose a policy that will actually protect you when you need it. It’s best to plan for the worst so you don’t find yourself under-insured.
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