Homeowners Insurance: The Details You Need to Get the Best Policy

When you purchase a home, you take on a whole new level of responsibility.

You have to make mortgage payments on time, maintain the property well and properly insure your home.

All of that can add up to a lot of stress.

Of all that needs to be done for your home, the homeowners insurance that you purchase is one of the most important tasks.

Let’s take a look at what you need to know about this crucial coverage.

Homeowners insurance: What it is

This insurance covers damages to your home, as well as losses and assets.

To put it simply – it’s protection for your home and all the things in it.

In addition, it acts as a safeguard for you if someone experiences an injury while they’re on your property, whether it’s an accident inside the home or a backyard mishap.

Sometimes a pet can wreak havoc on your living space. Fortunately, homeowners insurance covers pet damage, too.

It’s important to note that there are exceptions to what is covered.

For example, if you want to be covered in the case of an earthquake or flood, you would have to purchase a separate policy.

Damage that’s a result of failing to maintain your home isn’t covered, either. The financial responsibility of keeping up your home is all yours.

Why you need homeowners insurance

If you’re like most people, your house is the most valuable asset you possess.

Protecting it is not something you should take lightly.

While homeowners insurance isn’t a legal obligation, your mortgage lender will require you to have coverage in order to protect their financial investment.

If you fail to secure coverage, your lender has the right to purchase it and then pass the cost on to you.

Here’s a comprehensive look at what’s covered.

• Physical building and attached structures, including decks, garages and other out-buildings.
• Detached structures, such as repairs for fences and sheds.
• Personal property. You may be able to be reimbursed for certain belongings, as well as electronics and furniture. This coverage includes loss due to theft.
• You and the other people in your family. If you’re found legally responsible for repair costs, medical bills or legal fees related to damage to another person or their property, a liability policy can cover those expenses.
• Visitors to your home. In the event a guest suffers an injury while at your residence, your homeowner’s insurance can help pay for their medical costs.
• Additional living expenses. If you and your family have to move out of your house due to a fire or other covered damage to your home, your home insurance could pay for you to lodge in a hotel until it’s safe to return.

You may not think that this type of policy is all that important – until a friend comes over and breaks a leg on your swingset!

These kinds of situations are more common than you may think and it’s wise to make sure all your bases are covered.

Options for additional coverage

You have choices for further coverage.

These are some of the most common additional policies that homeowners choose to add:

• Water backup. Plumbing issues are not fun to deal with. Having coverage for a burst pipe and the damage that results can be a lifesaver. It’s important to note that this type of policy is not flash-flood coverage.
• Enhanced dwelling protection. There are a couple reasons you might choose a policy like this. One is to offset the cost of any construction you want to undertake in the future, when labor and materials may be more expensive than they are currently. You also may feel that the coverage you do have isn’t sufficient.  
• Identity theft expense coverage. It may seem like an insignificant matter in the big picture, but the truth is having your identity stolen can be a long, stressful and costly experience. Having this type of coverage can help you get back on track.
• Scheduled personal property endorsement. Are you an art collector? Or maybe you have some precious and valuable jewelry that you’d like to protect. This additional insurance is to cover the loss something that’s extremely valuable.

The amount of coverage you need

First of all, it’s important to note that the resale value of your home or the amount that you paid for it are not equal to the cost to rebuild it.

To determine the correct amount of coverage, calculate the expense to rebuild your home  –  not what you paid.

The cost to rebuild will be based on current construction costs.

If you don’t have enough insurance and disaster strikes, you’re on the financial hook for the difference.

When you work with an independent insurance agent, he can prevent you from being under- or over-insured  –  making sure you’re getting the appropriate coverage for your unique situation.

In terms of personal property coverage, 50% of your home’s worth is standard. Your agent can help you tweak that number to make sure you have the full protection you need.

Why work with an independent agent?

The world of homeowners insurance can be a confusing one.

There are a lot of weighty decisions to make and the consequences for making a mistake can be dire.

You can always go online and find a random insurance provider to purchase your homeowners insurance through.

But, will you be getting the best deal? Will the agent you speak with be there for the long haul? Will you even speak to the same person twice?

If you can’t answer these questions with a resounding, “Yes!” you should go a different route.

It’s best to work with an independent expert.

Here’s why you should choose to work with a local insurance agent.

• They can get you a better deal. If you think you’re going to open your laptop, Google “homeowner’s insurance” and have the best deal possible in 10 minutes or less, you’re mistaken. However, you can get the coverage you need at a price that’s in your budget when you work with an independent agent. She’ll have time to sit down with you and take a comprehensive look at your personal big picture.
• They’re good at explaining your options. Independent agents know their stuff. Not only are they knowledgeable, they know how to talk with non-insurance-minded people like you. Your agent will be able to explain what you need and the choices you have  –  in a way that helps you to understand, too.
• They’re on your side. If you’re buying your homeowner’s insurance online, once you put in your credit card number and hit “submit,” you’re basically on your own. An independent agent is in it with you for the long-haul. You have an advocate who’s looking out for you and can answer any question, anytime!
• They’re impartial. Independent insurance agents aren’t beholden to a specific provider, so they’re free to direct you toward the best policy for your unique needs.

Protect your investment

It may not be legally required, but securing homeowners insurance is vital.

The protection it offers can safeguard you from the financial devastation you’d experience if something happened and you weren’t covered.

Work with an independent insurance agent to make sure you have the coverage you need at a cost that fits into your budget.  

Are you satisfied with the homeowner’s coverage you have?