HOMEOWNERS Insurance Policy
A home inspires peace, relaxation and happiness. The last thing that you may think about when your home comes to mind is expensive damage or devastating mayhem. However, property damage can occur when you least expect it, and it can be financially burdensome to deal with. Buying homeowners insurance is an excellent way to prepare for the unexpected, and your home loan lender may even require that you purchase at least some coverage for your home.
Each home insurance policy is unique. Some are inclusive of all perils except for those that are specifically named in the policy. For example, a common type of damage that may be excluded is damage caused by an act of war. Other types of homeowners insurance only cover perils that are specifically named in the coverage. Some common perils that are covered are fires, theft and windstorm damage. It is important for homeowners to understand what type of coverage they have and to determine if they need to purchase additional coverage to fill in any gaps in coverage.
A typical home insurance policy also usually includes a component for personal property. This additional coverage pays for replacements to any furniture, appliances or other contents inside the home that have been damaged or lost. You will be able to set your coverage limit based on the estimated value of your home’s contents. However, some insurance companies require you to document your belongings beforehand, such as by providing photos of your belongings.
You can also set your own deductible amount within reason. Some homeowners will choose a flat deductible amount, such as $1,500. Others will choose a deductible amount based on the value of their home, such as one or two percent of the value.
While there are numerous options to consider when buying coverage, keep in mind that a home loan company may have specific minimum requirements to meet. Before buying coverage, explore your lender’s specific coverage requirements. Remember that you can choose to buy additional coverage if you feel that it is needed, such as by adding personal property coverage to your policy.