Archive for the ‘Home Insurance’ Category

Owning a home is a wonderful experience, albeit a little scary. In addition to the wonderful feeling of pride, ownership, and excitement, there can also be a little bit of worry and confusion. Part of that worry comes from questions about what will happen in the unfortunate situation that some disaster might befall your home. Fortunately, mortgage lenders require you to purchase insurance when you finance a condo, townhouse, or other type of dwelling.

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Homeowners insurance provides protection for your home, personal property such as furniture, clothing, and appliances as well as providing personal liability protection (in case someone becomes injured on your property and sues you). If you are a new homeowner, don’t stress out. Your insurance policy protects you from a variety of mishaps including fire, lightning, burglary, vandalism, storms, explosions, and more.

Many homeowners’ policies also provide other coverage, including off-premises theft protection and unauthorized use of your credit cards. Your agent can clue you in as to what additional coverage you can add. Also ask our agent what your policy doesn’t cover. For instance, a standard policy will not cover flood damage.

Your home insurance coverage should be equal to the value of your home. You should be aware that only your home and other structures are covered, not your land, so when decided the value of your coverage; you shouldn’t use the included value of the land to make that determination. Therefore, our insurance amount will could be lower than your purchase amount. Making the proper determination of how much coverage you need is crucial. If you insure your house for $200,000 but it costs $250,000 to rebuild it if it is completely destroyed, you would have to come up with the extra 50 grand yourself.

You will also have to determine the value of your home’s contents and decide between replacement coverage and actual cash value reimbursement. Replacement coverage means that in the event of a loss, the insurance company will pay what it costs to replace the property at today’s prices. Replacement cost policies give you more protection than actual cash value coverage, which will pay you for what your stuff is actually worth. If your antique piano cost you $5,000 two years ago but is only worth $2,500 today, that’s all you’ll get from the insurance company.

Home or condo insurance will not pay for some things. These items include loss due to settling, cracking, bulging, shrinkage or expansion of foundations, walls, floors, ceilings, walks, drives, curbs, fences, retaining walls.” If your home sinks into the ground like the one in the movie “Poltergeist,” you’ll be out of luck. Home insurance doesn’t pay for your mortgage if you lose your home, either. You still have to make payments on the mortgage, pay for living expenses in addition to any stipend provided to you by your insurance company, and buy all the stuff inside the home that you lost due to a fire, flood, earthquake, etc.

Termite or pest damage is another area not covered. If you have your home sprayed for pests, you will need to purchase a warranty from the pest control company in case of future outbreaks. Some warranties will even cover repair of structural damage caused by future infestations. You should also be aware that your coverage will repair or replace any damaged property with material of like kind and quality. That means you won’t get a whole new roof if only a few tiles are damaged by a hail storm, and if you do need a whole new roof, you can’t upgrade to a higher grade tile unless you want to chip in to pay the difference yourself.

In general, what your insurance will or won’t cover relates to the type of policy you buy and the amount of coverage, especially if you purchase either an “all risks” policy or a “named perils” policy. A named perils policy covers losses that are due to only those perils specifically listed in the policy, which typically include fire, windstorm, hail, and other physical losses. An all risks policy covers losses due to any peril except those which are specifically excluded in the policy, so an all risks policy provides broader protection than a named perils policy.