It’s Time to Protect Your Investment With the Proper Home Insurance Policy

It’s time to protect your investment with the proper home insurance coverage and price!

In most cases, a home is a person’s biggest asset. It can take years to save up the down payment, find the perfect home, get approved for a loan and finally move into your dream house. Now that you are finally moved in, it’s time to protect your investment with the proper home insurance policy.

Buying homeowners insurance can be confusing if it’s your first time in the home insurance pool. Here are a few things to consider when shopping for a homeowners insurance policy:

How Much Coverage Do You Need?

When it comes to homeowners insurance you need to buy a policy that will cover the cost of rebuilding your house, not the price you paid for the house, these figures are usually dramatically different.

When you purchased the home you were also buying the land the house sits on, which is usually not destroyed during a catastrophic event. As an example, if your house burns down, the land doesn’t burn with it, so your insurance coverage only needs to cover the cost of rebuilding your home.

In most cases, the cost to rebuild a home will usually be less than the price you paid for it but in some cases it can be significantly more, especially with very old homes. Your agent should be able to help you determine exactly how much dwelling coverage you should carry to properly rebuild your house.

Factor in Your Possessions

It’s not only the house that can be destroyed, your possessions can be consumed by fire or destroyed by a tornado. Do a careful and thorough home inventory of all of your possessions so you know the proper amount of contents insurance to carry.

There are a number of apps that can help you do a home inventory and even keep the results in the cloud so your inventory won’t be lost during a disaster. There are content limits to most policies, especially for high priced items. Jewelry, art, and collectibles may be limited to $2,500 in coverage so if you have a large number of these items, it may be necessary to purchase a rider that increases the coverage levels.

Replacement or Actual Cash Value

When it comes to homeowners insurance there are two methods that an insurer may use to calculate your losses, especially for your personal contents. Replacement value means that your settlement check will cover the cost to replace your items with brand new ones.

Actual cash value on the other hand, takes into account depreciation, which means your claim check will reflect the value of your belongings at the time they were destroyed. This can end up being less than the cost to replace them.
A replacement cost policy will typically be more expensive but the added cost is worth it when its time to make a claim.

See FAQ Page: What is replacement cost coverage and actual cash value?

Flood Damage Not Covered

A standard homeowners policy does not cover damage done by floodwaters. This is a common misconception that many homeowners fail to understand until it is too late. If your home is flooded, your homeowners policy will not cover the damage, a separate flood policy is needed.

If you live in a flood prone area, your lender will more than likely require flood insurance. While flood insurance can be purchased via a normal insurance agent, the price is set by the National Flood Insurance Program (NFIP) so shopping on price is not necessary.

Flood insurance can be expensive, especially if you live oceanfront but it can literally save your financial life if your house is destroyed due to flooding.

Roof Coverage

Billions of dollars worth of roof damage due to hail and other severe storms has resulted in insurers in certain states changing their deductible practices on homeowner policies.

On a standard policy, the normal deductible will apply to roof damage but with newer policies (in certain states) the deductible for the roof can be a percentage of the insured value of your home. In most cases it is a 1%-2% deductible but it can range as high as 5%. As an example, if you have your home insured for $200,000 and have a 1% deducible on your roof, you are responsible for the first $2,000 of your claim before your insurance kicks in.

In most cases, this only applies to wind and hail damage. Be sure to ask about the roof deductible when shopping for new policy.

Mind the Deductible

The deductible on a homeowners policy can range from $500 to $2,500 or even higher. The main point is to keep your deductible affordable. Experts recommend putting your deductible amount in an interest bearing savings account and leaving it there so you can easily cover your deductible in the event of a claim.

Shop Your Coverage

Finally, one of the most important things to remember is to shop your coverage on a regular basis. Insurers rate risk differently so shopping around can result in a major savings. Shop your coverage every one to two years. We can help, fill out our quick and easy form and we will forward your information to our national partners who will send quotes directly to your inbox.

At HomeInsuranceKing.com, we can shop up to 12 rates and coverage options with the the most competitive home insurance carriers in your area. Compare Your Home Insurance Quotes Today!