One doesn’t simply do with a home insurance policy. One NEEDS a perfect home insurance coverage plan. Your house is undoubtedly your most prized possession and one of the most valuable assets you have. You have put in your hard work and a lot of money into constructing your dream home. Any catastrophic devastation caused due to natural calamities like earthquakes will shake the entire foundational structure of your house. Your home may also be completely uninhabitable. It is only to protect you from such unforeseen circumstances that homeowners insurance becomes indispensable, for not just owners but also tenants. In the case of any damage, the emotional and financial burden of rebuilding it or reinstalling its contents is appalling.
We have compiled a handy homeowners insurance guide for your convenience.
What is Home Insurance?
Home insurance a.k.a homeowners insurance is a distinct type of property insurance that covers the house from various different kinds of dangers like perils, damages, accidents, and thefts. It covers losses and damages to not just an individual’s residence but also furnishings and other assets. You can buy a homeowners policy for a stipulated tenure with it being effective only for that tenure.
So, it’s safe to assume that homeowners insurance is also a type of term contract. When the stipulated period is over, you will have to renew the insurance plan if you wish to continue. To ensure that you get coverage under a comprehensive home insurance policy, you will need to pay a premium to the insurance company.
When a claim is made on any incident, the homeowner will be required to pay a deductible which is the out-of-pocket costs for the insured. Since there are a number of comprehensive home insurance policies at your disposal, as a customer, you can make use of any third-party financial website to compare them and choose one that is best suited to your requirements and your budget.
In some cases, home insurance is mandatory. For instance, if you have a mortgage your lender is most likely going to require you to have homeowners insurance. Before funding your mortgage or refinancing, the company will typically ask you to offer any proof stating your home is adequately insured. Why? Because the lender wants to be certain that its investment is protected if damaged or destroyed by a fire or other risks. Your mortgage company may also require other kinds of insurance that may be based on where your home is located. If it is located in a high-risk flood zone, for instance, you may have to have flood insurance.
The Ideal Homeowners Policy — Protecting More than the House
While any standard homeowners policy will help protect your house, it also ideally should help cover more than just the physical structure. From your personal belongings to the shed in your backyard or even medical bills in case someone is wounded or injured on your property.
Here are a few additional coverages that standard home insurance should include:
Dwelling Coverage
If a covered peril damages your house or any other attached structure, say a garage, dwelling coverage will help pay for repairs. The amount of dwelling coverage you would need is calculated by the square footage of your house and what it would typically cost to rebuild it. This is, of course, not the market value of your home necessarily.
Other Structures Coverage
The other structures coverage in your home insurance plan helps pay for replacement or repairs for various detached structures on your property like a shed or a fence increase if they are damaged or destroyed by a covered peril.
Personal Property Coverage
This will help cover the costs of the damage caused to certain belongings like electronics or furniture that are stolen or damaged by a covered loss.
Liability Coverage
If you or any of your family members are found legally responsible for accidentally damaging someone else’s property or injuring someone, liability coverage will help pay for the related repair costs and also legal fees in addition to covering for the medical bills.
Living Expenses Coverage
In case you cannot stay in your home after a fire or other perils covered by the claim, your homeowners insurance coverage will help pay for temporary living costs such as hotel bills.
What Are Excluded from a Policy?
Typically a dependable homeowners insurance may not apply to damage caused by flood, water that backs up through sewers or drains, surface water, earth movement, war, nuclear damage, etc. Personal liability and medical payments do not apply to the operation, ownership, use, etc. of any automobile, aircraft, RV, watercraft powered by more than 50 horsepower motor, and bodily injury or physical damage caused by an intentional act of the insured.
Whether your home insurance policy pays for the replacement or just the actual cash value of your possessions you will anyway be paid for personal property that you can show you owned at the time of loss. It is a great idea to keep an up to date inventory in a secure place. Also, to help you remember what you had (this may sound relatively easy but it’s not- you’d be surprised!), it is helpful to take videos or pictures of each room. A complete review of your policy is perhaps the only possible way to determine what property is covered and what perils are insured against.
The Three Levels of Coverage
A comprehensive home insurance coverage plan will cater to your needs across three levels, at least.
Actual Cash Value
Covers the cost of the house and the value of your belongings after deducting depreciation — that is, how much are the items currently worth.
Replacement Cost
In order to help you repair or rebuild your home up to the original value this covers the actual cash value of your home and possessions without the deduction for depreciation.
Guaranteed (or extended) Replacement Cost/Value
The most comprehensive, this inflation-buffer policy pays for whatever it costs to rebuild your home or repair damages — even if it’s more than your policy limit. Although certain insurers may offer an extended replacement (it offers more coverage than you purchased), there is a ceiling. Typically, it is 20% to 25% higher than the limit.
Thus, homeowners insurance is definitely not a luxury but a necessity. It protects your home and possessions against damage or theft.
Committed to excellence and backed by a thoroughly motivated team, Dickey McCay excels at creating the perfect, affordable homeowners insurance policy tailored to fit your lifestyle and needs. If you want to leverage state of the art home insurance coverage provided for Blue Ridge, GA, Murphy, NC, McCaysville, GA, Copperhill, TN, Blairsville, GA, Andrews, NC, and Tellico Plains, TN, get in touch today. They implement thoroughly client-centric solutions to protect your most valuable asset. United by a love for insured, safe homes, Dickey McCay hopes to channelize it towards the goal of serving conscious customers like you with a hassle-free, seamless and enhanced customer experience.