Elements To Look Out For In Any Homeowners Insurance


Owning a home is one of life’s major milestones. Your home is amongst your most important, if not the most important, investment that you’ll ever have to make. It serves as your personal castle where you raise and spend time with your family. It is the one place where you feel safe and secure. Considering how important your home is, it only makes sense that you would protect this investment. Having homeowners insurance in place is the best way of protecting your home.

In addition, nearly all mortgage lenders require that homeowners have coverage for the full value of the property in order to be approved for a mortgage. This helps to ensure that their financial investment is safeguarded against damage and catastrophic losses.

With that being said, if you are looking to take out homeowners insurance, then here are five important elements that you need to consider.

Home Owners Insurance for Repairs and Replacement

Building coverage, which covers the structures within your property, has two categories. The first is basic coverage which protects your home against damages resulting from natural disasters listed by your insurance provider.

The other category is repair and replacement coverage; this is one of the most important coverages to have as a homeowner. It pays for the total repair and replacement costs in case your home is destroyed. Having this insurance ensures that you have a safe landing net in case disaster strikes.

It is important to ensure that you take out a homeowners insurance policy that stipulates replacement coverage. This coverage is normally set at an amount higher than the market value of your home. Replacement coverage takes into account inflation of materials and labor costs when rebuilding your home.

Liability Coverage With Your Home Insurance

Another important element to look for in any homeowners insurance is liability coverage. This coverage offers you protection in case someone else suffers injuries or property damage within your property and seeks compensation. Liability offers coverage against things such as slip and falls, pet attacks, falling trees, and other unsafe conditions within your property.

Paying out of pocket for the medical bills of someone who sustained injuries on your property can leave you in a dire financial situation, thus having liability coverage will offer you some much needed financial support in such situations. To determine how much liability coverage you need, it is important to carry out some research in your area to find out the average amount constantly being awarded by judges in such cases. In case of a lawsuit, the costs of defending you in court will also be covered here.

This coverage not only covers you in your home but also anywhere else in the world.

Insure the Contents of the Home

In the event of a disaster such as a flood or an earthquake, not only will your house be affected but also your belongings and other items within your home can be damaged. Most insurance lenders provide standard coverage of up to 80% of the value of your belongings. However, you can take out additional coverage to cover the total replacement cost instead of the depreciated value of your property.

While some policies offer coverage for expensive items such as jewelry, art, collectibles and so on, this coverage is often limited. However, to insure for the full value of these items, then you need to take out a special property endorsement for these items. But remember that these come at higher premium rates.

Standards homeowners insurance also covers landscape items such as trees, plants, and shrubs. The coverage for these items amounts to 5% of the insurance amount placed on your house. This amount is often capped at $500 per item.

Additional Living Expenses Coverage

In case the damages inflicted on your home makes it uninhabitable or the restoration process requires you to seek alternative housing elsewhere, then additional living expenses coverage will pay for the incurred accommodation expenses such as hotel fees.

List of Covered Damages

Your insurance policy should clearly dictate the types of damages and threats that it covers. This includes things such as fire, hail, wind, falling objects, and vehicle damage. It is important to note that most standard policies don’t cover natural disasters such as hurricane floods and earthquakes. To get coverage for such damages, you’ll need to pay additional premiums. Hence, before taking out a homeowners insurance policy, you need to first check the list of covered threats to determine if it suits your situation.

So there you have it, the key elements to look out for if you are planning to buy homeowners insurance.