Typical Home Owners Insurance Coverage Characteristics
Home owners insurance can be tricky and even catch you off-guard especially if your agent is not well versed in this type of insurance.
Here are a few tips to help you make sure you are asking the right questions and getting the right coverage for your home and family.
1. What it typically covers:
Most home insurance policies will pay for damage to your home and your personal possessions in the event of fire theft storms or vandalism.
It also provides some liability insurance in case someone not in your family gets hurt on your property and decides to file a lawsuit.
Homeowners insurance can also cover the cost of a motel if you have to move out of your house while repairs are being made after a disaster.
2. What it doesn't typically cover:
Standard homeowner’s insurance policies have exclusions including power failure, war, government action, nuclear hazard, earthquakes, bad repair or workmanship, and defective maintenance; meaning you're not taking care of your home properly.
Water damage and flooding are only covered in certain conditions. As an example; if you have a pipe burst in the ceiling of your home, it is typically covered however water from below, like a backed up sewer, usually is not covered.
Also your home being flooded from a nearby stream or river because of heavy rain is not covered. You will need to purchase a separate flood insurance policy.
3. Make sure you shop around and take time to research prospective insurance agencies before purchasing a policy.
Make sure you read reviews and consider recommendations or referrals from friends and family.
Finding a cheap rate is great, but remember when you have an emergency and you're not covered correctly you will be in hot water.
Finding an insurance company with excellent customer service can really help alleviate much of the stress in case of an emergency.
4. Do not wait to file a claim if something happens.
Many insurance companies place a time limit for reporting claims after an accident or vandalism occurs. If you wait too long you may not be eligible for benefits, especially if waiting has caused the problem to get much worse. This is especially true in instances of water damage, where mold can grow quickly and add to the cost of the repair.
5. Tips to lower your homeowner’s insurance rates.
Make sure your home has a smoke detector and even a burglar alarm. This can help lower your rates.
Whatever you can do to reduce liability and risks within your home will make your rates lower.
You can also save money by bundling your homeowners insurance with auto or life insurance.
6. Make sure you keep good records.
Make sure you document all of your valuables when you first purchase your homeowner’s insurance.
Good pictures, detailed notes and even receipts, stored in a cloud drive online, like dropbox, will greatly help your insurance agent during the time of a claim especially if your house is wiped out by a fire or flood.
7. Jewelry is typically covered under homeowner’s policy, but...
But make sure you contact your agent when you purchase any jewelry that has significant value.
Many homeowner’s insurance policies have limitations on jewelry amounts.
You should contact your insurance agent to find out what those limitations are and purchase additional insurance if necessary.
One last thing to consider when you're purchasing homeowners insurance, especially if you have it bundled with your automobile insurance, is to get what's called an umbrella policy.
This will add extra coverage to your auto insurance and your homeowners insurance for a very small extra monthly fee. A typical good umbrella coverage amount is from 1/2 to 1 ½ million dollars.
Home owners insurance is among the typical new home buyer expenses most people have to deal with.