It is so important to look into the insurance you will choose when you’re purchasing your new home. Here are a few types of insurances and an explanation of each so that you can better understand what each does and what you need. We hope that these tips will really help you protect your new home.
Homeowner Policies
If you have previously rented a house before you bought this home you will be familiar of a much more simple version of this policy which is often called a renter’s policy. The Renter’s policy covers more inexpensive things if anything were to happen to you home such as a fire or tornado. Renter’s policies are relatively inexpensive, running about $15 a month in most areas, so more landlords are making them mandatory parts of rental agreements. A homeowner’s policy is designed to protect you, your family, your dwelling and your personal property from damage, both physical and financial, to some extent. Most policies are essentially the same, containing these components:
Dwelling coverage Your lender will require that if your property is severely damaged, it’s able to recover the amount of the loan you’ve borrowed. In the case that your home was a total loss, you’d have the option to either rebuild with those insurance funds or give them to the bank and own the lot free and clear. Dwelling coverage will also cover any major damage to your home such as damage from a hail storm. Although many acts of nature are covered, it is important to note that some policies exclude floods, earthquakes, and sinkholes.
Other structure coverage Other structure coverage can be applied to any major damage to sheds, detached garages, fences, greenhouses and any other permanent structure you have on your property.
Personal property coverage This is the part of the insurance policy that’s just exactly like renter’s insurance. If your property is damaged during a storm, stolen during a robbery or severely damaged by something out of your control, you can file a claim to possibly receive some kind of reimbursement. Replacement cost coverage provides the amount necessary to replace your items, so if this is an option, choose it. Again, though, there is probably not coverage for flooding, earthquakes or sinkholes, so be ready to ask about it.
Additional Coverage There are additional forms of coverage that you can choose from such as, identity fraud or from extra coverage for valuable collectables to coverage for identity fraud or the “ Water Backup and Sump Pump Discharge or Overflow” coverage that will cover any water that is forced into your house due to the sewage system. If you’re in an area where this is a possibility and the coverage isn’t much extra, definitely get this. The sheer nightmare that is water backup from a basement drain due to oversaturation is unspeakable and the smell unforgettable.
Loss of use coverage Many homeowner policies will also pay for you to live elsewhere while your home is being repaired after major damage. This is the loss of use coverage portion of the policy.
Personal liability coverage This type of coverage is for accidents that might happen on your property. If the neighbor were to fall on your property and become injured or a tree in your yard fell onto your neighbor's house, you don’t have to worry about how much the bills are going to be. Your insurance will cover it up to a certain amount.
Flood Insurance
Flood insurance primarily comes up when you’re looking to buy a house sitting on a piece of land that has even a tiny corner poking into a floodplain. Most homeowners don’t know that they can buy flood insurance no matter where they live. It is important to know this considering how many home in recent have flooded that aren't located on a floodplain.
Although there are many buyers and homeowners that believe that insurance is a waste of money, it is designed so that you never use it. While that may be true, the fact remains that if you do need it, you’re really going to need it and there’s no take-backs. You can’t change your mind and load up on coverage after that giant tree has fallen through your bathroom ceiling.