One of the biggest investments for the family is buying a home.
People, of course, need to protect thatinvestment and first of all,
they must have homeowners insurance.
Basic insurance policies will provide coverage for damage to your home, outside and inside the house.
Most standard coverage are:
Theft
Fire and lightning
Smoke
Frozen pipes
Ice and snow
Home Insurance also provides coverage for liability claims,medical payments to third parties, and
costs if a lawsuit is brought against you.
You must read carefully your homeowners insurance policy to find out what is covered and what is
not.
Do this before you suffer a loss, so you won't be surprised. Most insurers exludes damages
caused by an act of war, nuclear accident, flood, earthquake and terrorism, althought you may be
able to purchase special policies or endorsements that will cover these events.
Some homeowners insurance policies limit coverage for certain high priced or hard to replace items.
Additional endorsements or flaters will be necessary to protect items like engagement
rings, watches,
furs, antiques and other valuables.
Mortage lenders require that borrowers purchase a minimum amount of homeowners insurance. This
is typically equal to the appraised value or the purchase price of the home. But often, this is not the
amount of coverage you realy need. Instead, find out how much it would cost to rebuild your home,
and consider insuring it for that amount.
If you are willing to pay more to have damaged personal property replaced, consider purchasing
replacement cost coverage with your homeowners insurance. When it comes to valuing property,
insurers generally use one of two methods. The first, actual cash value, pays you an amount equal to
the replacement value of the property, minus depreciation for the years you owned the item. The
second, replacement cost, is more expensive, but it pays you the full value of the item today, so that
you can replace the old item with a new one.
To save money, consider choosing a deductible of $250, $500, or $1000. In the event of a loss,
you'll be required to pay this amount out of your own pocket before your homeowners insurance
takes over, but in the meantime, you'll save on premium charges.
Don't forget to tell your insure if you have a home security system, because most insurers offer
discounts for such safety features. You may also qualify for a lower insurance premium if you
live near a fire department or hydrant, own a newer home, own a home built out of fire-resistant
materials, or get your auto insurance of the same company.
Remember that the lowest price does not always equal the best deal.
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