Insurance is complicated. Unfortunately, many home owners don't realize just how complicated until something disastrous happens and you're stuck dealing with insurance claims. When you have a great insurance agent, they'll happily walk you through all the terms and coverage in order to create confidence in what you're about to purchase! To get you familiarized with some of the terms, and prepare for your chat with your insurance agent, keep reading.

roof of a home against blue sky

So what important things do home owners need to know about homeowners insurance?

Flood and Earthquake Damage is not normally covered

Standard homeowners insurance policies do not cover floods and earthquakes. Most homeowners aren’t aware of this until it’s too late. A good insurance agent will inform clients of this little caveat, but someone on the other end of an 800 number probably won’t. Definitely bring this up when shopping for homeowners insurance, and ask for separate coverage options for floods and earthquakes.

Limitations

Insurance coverage can be tricky. Let’s say you have expensive pieces of jewelry, and you haven’t checked your homeowners insurance properly. Most of the jewelry won’t be fully covered, even with a rider. Limitations are placed on how much the insurance will pay out for a stolen piece of jewelry. Always discuss the limitations of your policy with your agent. Know the specifics, and purchase additional insurance when necessary.

What replacement cost means

When purchasing your homeowners insurance, make sure your agent has gone over how much REPLACEMENT cost is a part of your policy. Let’s say your home is worth $300,000, and you decide to cover your home for $200,000 and there’s a fire causing an extensive amount of damage. Just because your home is WORTH $300,00, does not mean you’re covered for $300,000. What you are covered for is $200,000. If the damage is MORE THAN $200,000, you’ll be paying out-of-pocket for any costs over your coverage. Always have enough coverage to make yourself whole again.

The best way to save on your insurance is to review your policy each year, and be sure you have the proper dollar amount covering your home.

Cash value - do you know what it means?

After a disaster in your home, destroying it, you might not choose to rebuild. Insurance companies get this. They’ll offer you a replacement cost, which will deduct money based on depreciation. That right there is your cash value.

Know what liability means

Basically, if you have significant assets, you’ll want to make sure you have good coverage. Homeowners insurance covers home owners if there’s an accident involving anyone on their property. If someone is hurt, it’ll cover medical care. If they sue you, it’ll cover court costs, as well as whatever the injured party is awarded in court. The key is to have sufficient coverage so you don’t lose EVERYTHING regardless of your insurance coverage. It happens. Home owners get caught without enough coverage, and end up broke and in debt, when they could have avoided it with the proper liability coverage.

Always ask your agents plenty of questions before handing over your premium! 

 

Share |


No Comments


Post a Comment
Name
Required
E-Mail
Required (Not Displayed)
Comment
Required


All comments are moderated and stripped of HTML.
Submission Validation
Required
CAPTCHA
Change the CAPTCHA codeSpeak the CAPTCHA code
 
Enter the Validation Code from above.
NOTICE: This blog and website are made available by the publisher for educational and informational purposes only. It is not be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state. By using this blog site you understand that there is no broker client relationship between you and the blog and website publisher.
Blog Archive
  • 2019


View Mobile Version
Social Icon Social Icon Social Icon
© Copyright. All rights reserved | Powered by ITC