Saturday, November 2, 2013
Home Insurance Coverage Basics
If you're smart, you have home insurance coverage. If you don't, you need to buy a policy as soon as possible. Because, as much as we don't want to think about it, the unexpected happens. When loss happens, you need coverage. You might also not know that more than just your home is covered, for example you'll also be covered against liability should someone become injured on your property. Simply put, you need insure your home to cover you from significant financial losses you simply cannot afford. Here are some facts you need to know.As your largest and most important investment, should you have a fire or some other kind of property damage, you'll at least need monetary compensation to help you get back on your feet, even if you can't replace every single piece of property lost by your misfortune. Losing your home is bad enough; it's worse, though, if you don't have the monetary resources to help you recover from this loss.If you already have a mortgage, then it's likely that your lender has already required you to have insurance policy in place. Standard home owner insurance coverage can differ, but most have different types of coverage contained within a single policy so that it's most cost-efficient for you to buy. Usually, you will have five different types of coverage in your homeowners policy. The first of these is property damage coverage which protects your home and property if they are damaged or destroyed by certain perils. .Liability coverage protects you if someone should file a claim against you because they've been injured or have had property damage caused by your negligence. It should be noted that this type of liability coverage is for negligence not caused by your automobile.Coverage for medical payments in your insurance policy will pay for medical treatment if someone has been accidentally injured on your property. It also applies to certain situations that occur when you're not at home, whether or not you are actually at fault. Coverage for additional living expenses will pay for your move into an apartment or a motel if you cannot live in your home because of damage covered by your policy.Other types of home insurance coverage protect the contents of your home, other structures on your property, and shrubbery and trees. You should be note that standard homeowners insurance coverage does not cover flood damage; this is a type of insurance policy that you need to purchase separately from your standard policy.How much insurance should you buy? You need to buy enough homeowners insurance so that you can protect both the structure (your home itself) and the contents within if you should have a loss. your task here is to figure out how much it would cost you to replace your possessions and rebuild your home today, using today's prices.Your homeowners policy will insure your personal property on an actual cash value basis. You are normally going to encounter limits that are 50% of the policy limit, of the structure value. Replacement cost can be considerably higher than the price you originally paid for your home.Given this information, you can see that your home insurance policy needs to offer you adequate protection. Therefore, be wise in your purchase. After the purchase of your home itself this will be one of the best investments you'll ever make. Hopefully that day doesn't come, but you'll breathe a sigh of relief that you have home insurance coverage in the event you experience damage or loss.