We often nurse the idea that homeowners insurance is another way the rich can waste money. However, insurance is essential for protecting your residence and everything in it.
Purchasing this insurance should be the next step as soon as you buy a house. Getting even a basic protection for your house is a necessity nobody should miss out on.
We know it may be pricy, yet, we must understand that it’s more expensive to deal with damages without insurance. With home insurance, it is easy to sleep well at night without worrying about the safety of the roof over your head.
For this reason, obtaining insurance for your house must not be taken lightly. Most times, your financial security depends on it.
Therefore, this article is to help you understand the basics of homeowners insurance.
What is homeowners insurance?
A place of residence is as important to the property owner as it is to a tenant. They all have a common goal to protect and prevent damages of any kind. This is why most property owners are comfortable with renting out to strangers.
However, we can’t be too careful as many unforeseen events can ruin a house in a split second. It may be difficult to stop these events but active coverage helps us deal with the aftermath.
With homeowners insurance, houses, possessions, and valuables are protected when perils occur. Even occupants of a house can receive coverage depending on the insurance policy they buy.
Homeowners insurance coverage plans
Dwelling coverage
Dwelling coverage settles the cost of damages, replacements, and repairs by the perils of your policy. If you opt for this plan, it is wise to buy coverage worth the amount it costs to replace your property.
Additional structures
The price for this coverage is at least 10% of the property coverage. Other features in your home aside from the actual property get protection under this plan. These structures include a shed, fence, garage, and gazebo.
Personal property
This is another coverage that doesn’t pay for the main property. Instead, it covers the cost of personal belongings that are stolen or damaged. The ideal range for this plan is set at 50-70% of the dwelling plan.
Liability coverage
If you incur costs from damages on and off the property, liability coverage pays the bills. It happens to be one of the most expensive coverage plans with a minimum premium set at $100,000. Moreover, this plan is responsible for the cost of lawsuits and settlements when the situation demands.
Medical coverage
Medical plans are usually affordable with a $1000-$5000 limit. This coverage helps when there are accidents occur in your residence. No matter who is at fault, it covers the expenses.
Additional living expenses
Another name for this plan is ‘loss of use’. It pays for extra living expenses if you must leave your home for a while because of repairs or damages. This plan costs $20%-$30% of your dwelling plan.
Tips for buying homeowners insurance
Get the correct rebuilding cost estimate
Failure to get the right information on the cost of rebuilding can affect your insurance. By paying less than the actual cost of rebuilding, your insurance may not serve you right. Therefore, your choice of dwelling coverage must be equal to the rebuilding cost.
Provide the correct information
Holding back the value of your property may cause them to recommend plans that don’t match your needs, It is important to give proper account to your insurers before buying a policy.
Check for extra coverage
Try not to skip add-on coverage, you need them to improve the basic options. When shopping for home insurance policies, pay extra attention to the companies’ add-ons.
Consider insurance discounts
As with other types of insurance providers, Homeowners insurance companies offer opportunities for discounts. Find out how to qualify for insurance discounts.
Compare multiple quotes
After deciding on your choice plan, compare the rates of at least five companies. You can only find out the company with the best rate after checking out quotes from different companies.
Research customer service
After the price, you must look into a company’s customer service. Go online and check for reviews to discover the best provide. This service may affect you if you ever need the services of a customer agent.
Conclusion
To conclude, homeowners insurance should not be taken for granted. A good insurance company will walk you through the insurance policies and the perils they cover. While you shop, remember to refer to the tips in this article to avoid any difficulty.
