A home is usually your biggest investment so it's important to have it properly insured. Unfortunately, many do not know what their policy does and does not cover. It is important to understand that there are 4 primary components for homeowners insurance and to understand what these components are.
The first component is the structure itself, the building including the garage and the deck as well as unused structures as a shed. When you buy the home, you usually have home insurance for the amount you paid for it or you are insured for the conversion value. This means that if your home is a total loss, the policy will provide a compensation up to the policy limit to replace the structure. You want your home insured so that you can completely rebuild it, this is the replacement value.
One problem that many homeowners face is that they are underinsured and do not have enough insurance to cover repairs to their home or home remuneration if they are subjected to significant damage. An accurate assessment of your home should be completed so that an exact remuneration fee can be determined. Your insurance company will be able to help you determine this amount.
The next component is for personal property. Most companies insure the personal property of the home for about 60-70 of what you insure the house for. For example, if a home is insured for 200,000 then the personal property is usually insured for approximately 140,000-150,000. Personal property insurance can be increased if the belongings in the house are worth more. However, this may be at an additional cost. There is no cost to keep it proportional to the insurance on the structure, but when you raise personal insurance, there will be a small fee.
Personal property insurance usually covers things like furniture, clothes, toys and home accessories as home furnishings. There are often restrictions on jewelry, art, fur, expensive carpets, electronics etc. These more expensive items should often be covered by a personal owner.
In addition to not knowing what is covered by insurance, many homeowners do not know which belongings are in the home. Not having a housing list is a big mistake when it comes to insuring your home. Do you know what you have and keep 2 copies of the inventory, one for a fireproof host in the house and another copy for another location outside the room, such as a safety deposit box. This will be useful if the unexpected happens.
Another component of homeowner insurance is liability coverage, this is a very important component. If you are sued or if someone claims to you or if the court is held liable for someone's damage or property damage, your insurance will provide a certain liability insurance. The responsibility covers the owner from personal liability, damage to someone's property and medical expenses for injury to others.
The last part of a typical homeowner insurance is the additional cost of living. If you are displaced from your home due to a loss covered by your homeowner's insurance, such as a fire or frozen and broken pipes, etc., this part of your insurance will help to pay for your hotel or apartment expenses. So not only should your insurance pay to repair damage to your home, but it should also compensate you for additional cost of living while the repairs are complete.
Be confused and believe that your homeowner insurance cover only the home itself. There is a lot of coverage in your homeowner policies that may be useful in times of need. Other than the liability insurance and the supplementary life insurance insurance, if you have a loss of personal property when you are outside the home, your insurance policy can cover the loss. For example, if you have traveling bags stolen while on vacation, you are carefully covered.
Many buy homeowners insurance but they do not carefully review the policy to understand what they are buying and how much coverage they have. For example, you want to make sure you have enough insurance to cover the conversion of your house after a fire, not just enough insurance to cover what it would sell for on the market right now.
When working with an insurance company, be sure to ask what is not covered by the policy. Most standard insurance does not cover earthquake damage, flood damage or electrical damage. Floods can be covered by additional insurance through the National Flood Insurance Program if you want flood insurance. Sewage protection is also not covered, but can be added to your insurance with a rider. Mold, fungus, rat and bacteria are also typically not covered by a standard policy.