Can you read your homeowners’ policy without falling asleep? Do you know what it says? You need all the help you can get staying informed about what is in your policy, and how it applies to your security. Here is some information to get you started.
Perils and Policies.
Something that exposes you or your property to damage or loss is called a “peril” in most insurance language. Many policies will talk about “named perils” that can be spelled out as either covered or excluded from coverage in your policy.
Policies can be written on al “all-perils” basis, which covers pretty much everything, or they can be spelled out as to exactly what and under what circumstances an event is covered. Policies differ mainly due to the number of perils covered, with more meaning higher premiums.
How Much Insurance is Adequate for Me?
You should have enough insurance to pay for one hundred percent of the cost of replacing your home. That may be more or less than the value of your home, but it is what you insurance company will pay for.
A replacement cost policy will pay for replacing the structure insured with like materials, and will not depreciate the value from use. It’s the easies way to insure that your home can be replaced if a catastrophe happens.
Personal Liability Coverage
If you have something to lose, than you need coverage in case someone can hold you liable for an injury occurring on your property. Slips or falls can cost you a bundle and you need to be prepared for them.
Having something out of the ordinary on your property, like a pool or trampoline, or if you allow hunting or some sports activity, then your need for personal liability insurance increases.
Insuring Your Personal Property
Everything inside your house will be considered personal property and is insured through homeowners’ insurance.
Check you homeowners’ insurance if you tend to have larger amounts of cash around to make sure that it would be covered in a loss. Same thing with expensive paintings or collections that have high monetary values, make sure they are covered.
You should have an inventory of all the things in your home, with the exception of a car or boat. Those are separately insured. The list should include everything; outdoor furniture, paintings, jewelry, electronics, kitchen equipment. Try to be as complete as possible, and then check the personal property limits of your policy to make sure they are in line.
Flood and Earthquake Coverage
According to the Federal Insurance Administration, a flood is 26 times more likely than a fire in a 30 year mortgage, but flood insurance is relatively neglected unless you live in a flood zone. It’s a good idea to get flood insurance, because your homeowners’ policy is not going to cover a flood.
Earthquake insurance seems like a California thing, until you realize that you may live on the New Madrid Fault that runs through Kentucky, Arkansas, Tennessee, and Missouri.
An earthquake will likely cause damage that will be difficult for most homeowners to absorb financially, so most agencies suggest getting earthquake insurance regardless of what part of the country you live in.
Other Insurance for Homeowners
As a homeowner, you may want to consider other options for insurance.
Life insurance is an obvious one.
You can get a personal liability policy to add extra coverage for liability for your house or car with an umbrella policy.
There are options to increase coverage for personal property if you have valuable jewelry, paintings, or family heirlooms.
Shopping for Insurance
Since the beginning of insurance, there hasn’t been a better time to shop for it, thanks to the internet. It allows you to compare prices and coverage, and be more educated on insurance laws than ever before.
Picking a company
With the power of the Web at hand, you can find out a great deal about insurance companies and how their customers feel about the kind of services they provide. You can always find a cheaper company, but finding one that has a high satisfaction rate along with premiums that you can live with will make a big difference when you need them.
A good decision now will make a difference in security and risk of loss later. Insuring your home well, will help to insure your families future.