More and more Americans are buying homes thanks to lower interest rates and a buyer’s market. Buying a home can be a challenging and intimidating experience, especially if you are a first time homeowner. While you will have many decisions to make during your home buying experience, choosing your homeowners insurance is one of the important choices you need to make thoughtfully. Your homeowners insurance will protect not only your home, but also your possessions. Protecting your most valuable asset is critical. Damage to your home or possessions can be financially devastating and your homeowners insurance will protect not only your home, but your overall financial well being. Your homeowners insurance policy protects far more than just the house. It also protects the homeowner and anyone named on the policy, like a spouse, guest or employee. A standard homeowners insurance policy includes three kinds of coverage.
The first is, as you might expect, is structural coverage. A homeowners insurance policy provides coverage for the structure of the dwelling, in case of common causes of damage, including fire and lightning, theft, smoke and extreme weather conditions. Typically, the homeowners insurance policy covers anything that is not listed under exclusions, and additional coverage may be purchased for many common exclusions as an addition to your policy or an additional, specific homeowners insurance policy as is the case with flood insurance.
You should think carefully about coverage amounts. You want to be certain that you have adequate coverage to replace or rebuild your home, not just cover your mortgage or equity in the home when you purchase home owners insurance coverage.
Your personal property and possessions are also covered by your homeowners insurance policy. Your insurance policy may even cover theft or damage on your possessions that occurs outside your home. Policyholders should make an inventory of their possessions, keeping serial numbers and other relevant information, such as date of purchase and purchase price. Many people choose to videotape their inventory. Do be sure to keep the inventory off-site or in a fireproof safe, in case of fire or other loss.
Half of the value of the dwelling is typical for personal property coverage on the standard homeowners insurance policy. Some items may have coverage limits, and these amounts may not cover replacement costs. In that case, homeowners may wish to purchase additional insurance to cover these possessions.
Homeowners insurance also provides the homeowner with valuable liability coverage in case of a lawsuit. A typical homeowners policy includes $100,000 in coverage. This amount is adequate for many homeowners, but if you have concerns about whether this amount will meet your needs, do consult an insurance professional regarding the availability of additional liability insurance.
Homeowners should periodically review their homeowners insurance coverage to see that it meets their current needs. Making major purchases, adding home improvements, or a significant change in the local real estate market may all impact the value of your home and thus, the amount of homeowers insurance coverage you require. Your insurance agent can help you review your home inventory periodically, as well as any changes to make certain that you have appropriate and adequate coverage.