Homeowner’s Insurance is often one of the least understood types of coverage. It will pay for the cost to repair or replace your home if it is damaged, as long as the damaged property is insured properly. In order to ensure you are fully protected, you need to understand how your homeowner’s insurance policy works and what it does and does not cover. Let’s talk about the top things you must understand about getting Homeowner’s coverage.
Replacement Costs vs. Actual Value
You typically want your policy to be for replacement cost, not just for the value of your home. Building a house comparable to the one you have may cost more than the house is actually worth, especially with home construction prices on the rise and/or if you have completed upgrades to your home.
Adequately covering the value of goods in your home
Homeowners insurance covers not only the cost of your home, but also of the cost of your possessions inside. You may not realize how much all of your things cost until you have to replace them all. Make sure you make an accurate accounting of all the furniture, electronics and other items in your house and think about how much it will cost you to replace them in the event they are all destroyed.
Updating your insurance company about life changes
Keeping your agent updated on life changes such as a family member moving in or a child going away to school will ensure we can provide you with adequate advice or adjustments you may wish to make to your existing policy.
Accounting for specialty items
Some homeowners believe their policy will cover everything in the house. However, if you have jewelry, guns or other special items, those may not be covered in your standard policy. Make sure you acquire any riders- an insurance term for additional coverage- that you need in order to be protected.
Understanding policy exclusions
Homeowners insurance covers most damage to your home, but will not cover things such as flood or earthquake damage. Check with your agent to find out if there are special policies you should acquire to make sure you are protected.
Maximizing available premium discounts
Acquiring your homeowner’s insurance, auto insurance and even life insurance through the same company will typically provide for a substantial multi-policy discount. An umbrella policy is something everyone should consider and provides the opportunity for an additional multi-policy discount as well.
Taking full advantage of the coverage afforded
Some homeowners may be unaware, but if you are traveling and are robbed and lose your laptop and your engagement ring in the event, your homeowners insurance policy may cover the cost of the replacement if scheduled on your policy. If you suffer a loss, contact your insurer to see if you are covered.
Your homeowner’s insurance will not generally pay for normal wear-and-tear on the home. For example, if you need new pipes because your pipes are old, most policies don’t cover that. Don’t assume that just because you have a home insurance policy that you won’t need to be financially prepared for problems with your home. Have an emergency fund to take care of problems.
Fixing problems in a timely manner
If you have mold growing in your home, for example, your insurance company may take care of the cleanup if it is the result of a covered loss. However, if you are informed of the problem and do nothing and the problem grows and becomes far more expensive, you may be precluded from making a claim since you caused the problem with your inaction.
Choosing the right deductible
The deductible is the amount you have to pay before your insurance kicks in. While setting the deductible high can lower your monthly premiums, if you do not have the money to pay $1000 or $5000 when something goes wrong, you’ll need to either set aside that money in an emergency fund or pay the higher premiums for the lower deductible so that when something goes wrong you aren’t left unable to fix it.
Taking The Next Step
At Endline/Pike Insurance, your personal agent will spend the time to fully explain each of your policy options, ensuring your understanding on this important part of protecting your home and contents. A clear understanding of your homeowner’s insurance is important for every homeowner.
Contact one of our Insurance Professionals at 989.662.6479 for additional information.