Getting Homeowners Insurance

Most people simply can’t afford to rebuild their home and replace everything in it if there’s a disaster. A homeowners insurance policy can protect your property, some of your personal possessions and yourself. It’s a package policy that combines two types of coverage:

Coverage against your property being destroyed or damaged by certain perils, such as fire, theft and windstorm

Coverage for liability exposure – for example, someone being injured on your property

With the right policy, you’ll feel comfortable knowing that, in the event of a disaster, your property is protected.

No matter what type of home you own, insuring your personal property is your responsibility. If you live in a condominium, remember that the condo association or cooperative won’t pay for damage caused inside your unit, even if it results from an incident outside of your control, such as a pipe bursting or an electrical fire.

If you live in a free-standing property, in addition to insuring your personal property inside, you must also protect your “dwelling,” or the physical structure of your home. Make sure you purchase enough insurance to cover rebuilding your home from the ground up and replacing everything inside.

Insurance policies can be as individual as you are. According to the ASPIRA/Nationwide Insurance education program, in a broad sense, homeowners’ policies cover:

Dwelling – Coverage that protects the structure of the home (roof, walls, wall-to-wall carpeting, etc)

Other Structures – Coverage for sheds, detached garages and other structures not connected to the main dwelling itself

Personal Property – Coverage for personal items (clothing, furniture, appliances, computers, etc.) Provides coverage on and off the premises

Loss of Use – Coverage for when an insured has to move out of the home while repairs are made as a result of damage caused by a covered loss

Liability Insurance – Pays for damages the insured is legally obligated to pay due to bodily injury or property damage

Medical Payments – Pays for medical and/or funeral expenses incurred by a person on or off the insured’s property

 

Get enough insurance. While it sounds simple, make sure you have enough coverage to completely rebuild your home (or ensure you have the deposit for a new rental), replace your personal belongings, and protect yourself in case someone is injured on your property and sues you

Consider the amount of the deductible. Generally speaking, the higher the deductible the lower the premium

Ask about available discounts. A number of discounts may be available for things like installing smoke detectors and wind-resistant shutters, to insuring your home and auto with the same agent. Your agent can give you the details on how to save on your premiums

Consider all situations. There are certain hazards that your regular homeowners insurance doesn’t cover. However, you can add specific coverages for an additional cost. For instance, while flood damage is not generally covered, if you live in a flood zone, you can purchase flood insurance through the Federal Emergency Management Agency (FEMA)

Talk with your insurance agent to make sure you’ve accounted for everything you want to cover.  Keep a list of your valuables and consider taking pictures. It’ll help speed up the process of getting your things replaced

Usually insurance companies offer “riders” – provisions that are added to your policy to provide coverage. The ASPIRA/Nationwide Insurance education program defines two riders you can select:

Actual Cash Value – The value of the property lost or damaged at the time of the loss.  This method of valuation takes into consideration depreciation based on such factors as:

Age of the item

Market value

Condition of the property at the time of loss or damage

Replacement Cost – The cost of replacing damaged or destroyed property without deduction for depreciation in the value of the property.