6 Things a Homeowners Insurance Policy Should Have

A homeowners insurance policy should be one of your main priorities when shopping for a home. Without this policy, you could quickly be out hundreds of thousands of dollars if your home was to go up in flames or even get destroyed by a flood. No matter what the situation may be, a policy is going to protect you from just about any disaster, no matter how big it is. Now, before you set forth and buy a homeowners policy, there are a few things that you should look into before agreeing upon one:

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#1 What kind of liability?

If any damage was to be caused outside or inside of your home, the liability coverage would protect you. For example, if a visitor tripped and broke their ankle due to something faulty on your property, they could turn around and sue you. To help protect you from this type of situation, it’s important to know what kind of liability you have. This liability can range anywhere from $100,000 to as much as $250,000. If you wanted more than that amount, you can add something known as an “umbrella” policy. An umbrella policy can generally cover up to $1 million in coverage.

#2 What is your deductible?

With most insurance policies, a deductible will be involved. The deductible is the amount you’re going to be responsible if something happens. So if you had a $500 deductible, you would always be responsible for the first $500 if a disaster were to strike. For example, let’s say that a flood caused $15,000 worth of damage. You would pay the $500, and the insurance company would pay the extra $14,500.

#3 Do you have enough insurance?

When you get a homeowners insurance quote, the company will more than likely want to know what your structure is worth. While they can give you an estimate, you have to figure out if it’s fair or not. So if the insurance company claims your home would cost $180,000 to rebuild but you think it would cost $220,000 to rebuild it, you better tell them this so that you get sufficient coverage. Remember that most estimates will be close but it doesn’t hurt to do your own due diligence.

#4 What about the contents inside?

Homeowners insurance policies are going to protect more than just your home. What else do they cover you may be wondering? Well, the contents of your home. This is going to include your electronics, your TV, couch, stove and anything else of value. With most contents, the homeowner will usually just give a ballpark estimate. This can range anywhere from $500 to as much as you’d like. When creating this amount, picture losing everything today. What kind of check would you like to get everything back to how it was?

#5 Where will you stay?

If your home was to be destroyed, where would you stay? While your home is being rebuilt, insurance companies will place you in a temporary house for the time being. It’s important to know what will be offered if the worst case scenario happens.

#6 What disasters are covered?

For those that live in states that are affected by earthquakes or floods, you have to understand that your basic policy doesn’t always cover these disasters. If you want to be covered in case of an earthquake or flood, make sure that you’re protected. Again, if you don’t know if you’re covered, ask ahead of time because no question is a bad one!

About the Author: This was a post written by Hannah M. She is the co-founder of howmuchisit, a website that researches the price on just about anything that you can think of.

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