A Comprehensive Home Insurance Buyer's Guide

Many people treat their home as their very own castle and their possessions as crown jewels. When you look at your home in this way then it is only reasonable to treat home insurance like a troop that stands guard around your castle. Much like a well-trained troop of guards, a good home insurance can give you a much-needed peace of mind.

But of course, you will have to take several things into consideration before purchasing a home insurance. Here we provide you with a comprehensive home insurance buyer's guide to help you gauge if you need a home insurance and if so, how much you need. As an added bonus, we have provided a discussion on umbrella policies and how you can benefit from it.

Who Needs Home Insurance?

There is much debate going on regarding the need for home insurance, especially in view of the fact that there are several different types of insurance and each has its pros and cons. In the end, however, you alone can make the decision as to whether you will have your home insured or not. Here are some things you should consider in making this decision.

The first thing you need to do is identify how much your house is worth. It is more practical to buy a home insurance if you have a relatively expensive home, or if your house is worth more money than what you currently have in the bank. It may not be practical as well to buy insurance if your home is not located in a high danger area.

Another consideration is if you had to borrow money from a lender in order to buy your home. Most lenders require the homeowner to purchase insurance on the property, with them as one of the beneficiaries. This is because the lender considers your home an investment and they have vested interests in it.

How Much You Need

The amount of insurance you need depends on a lot of things, but in general, you need enough insurance to cover a hundred percent of the replacement of your house, coverage for the contents of your house, the cost of living somewhere else while your house is being repaired, and the cost of your liability to others. The cost of replacing your house is not the same as the amount that you paid for it; neither is it the market value of the property. Rather, it is the current cost of rebuilding the structure.

Coverage for the contents of your house or your personal property includes mostly furniture, but there are some policies that cover jewelry, electronic equipment and other valuables up to a particular value. You may want to do an inventory of your belongings so that you will have an idea of how much they are worth. Coverage for the cost of living somewhere else during rebuilding must cover the cost of meals, house rental or hotel bills and other living expenses. The need for coverage for your liability to others is very important in case someone is hurt within your property.

What Homeowner's Coverage Should You Consider?

When purchasing homeowners insurance, the person needs to realize that there are several types of coverage's and plans that they can get. The idea is to get something that covers the majority of your home should something happen and the homeowner only has to pay a small expense out of pocket. There are policies that cover the entire home at 100%, which is something that the person will want to consider. In addition to actually buying coverage that covers the home itself, there are certain coverage's that the person will want to consider.

First off, the person should consider the replacement costs coverage that covers the appliances in the home such as the heating and cooling system, which can cost a lot out of pocket to fix. Secondly, consider the weather coverage's that the person may need. Those that live in an area prone to earthquakes or flooding, will find that this is additional coverage that the main homeowner's policy will not cover. Thus, these are coverages to consider.

In addition, consider the property replacement coverage that is meant for the furniture and other personal belongings that are in the home. People will also want to consider the liability coverage that protects them should someone other than those that live in the home and get hurt, then file a lawsuit against the person.

What You Should Know Before Buying Homeowners Insurance?

Before purchasing homeowners insurance, there is a lot that the person needs to know about their home in order to make wise decisions about the coverage's that they get. For starters, they need to know the actual replacement value of the entire home. This will allow them to get enough coverage to pay for replacing the home should something happen. Secondly, knowing what type of natural disasters that are common in the area can help find coverage that protects the home from things like floods or earthquakes.

The person will also want to consider just how much property that they have that is placed in the home and what it would cost to replace these things. This is going to be the way to judge just how much personal property coverage that the person will need to be covered.

You will want to pay special attention to the deductibles and limits that the homeowners insurance policy has on it. These items will help to determine if the policy is a good fit for the person and their home or not. If not, then shopping around is the best way to find the policy that best fits the needs of the home and the homeowner.

Umbrella Policies

This type of policies can be directly related to the coverage of your liability to others. Umbrella policies protect you against the likelihood of lawsuits in case someone gets hurt in your house or anywhere within your property. Of course, like any insurance policy, there are things to be considered in making the decision of whether to buy an umbrella policy or not.

For example, if your home has recreational features like a swimming pool, Jacuzzi, or children’s playground then it is definitely a good idea to get an umbrella policy. But if you don’t normally have a gathering in your house, or if you feel that your home doesn’t have features and fixtures that are prone to hurt anyone then an umbrella policy may not be that important.

If you do decide to get an umbrella policy then you should get one that has a broad range of coverage. Your policy should not only cover bodily injury and property damage caused by you, your dependents, or your pets, but it should also protect you in cases of false arrest and imprisonment, defamation, malicious prosecution, invasion of privacy and wrongful entry, among others.

Umbrella policies normally kick in after your regular liability insurance has run out, at which point they cover the amount above what your regular insurance has shelled out. Take note that umbrella policies usually do not cover punitive damages, since these are generally used to punish you for your conduct. These policies also do not cover damages arising from intentional acts.

With these guidelines in mind, you should now be more confident when consulting an insurance agent regarding the purchase of a home insurance. Now you can be sure that the insurance policy you get is just the right one for you and your home.