5 Things you should know about homeowner’s insurance

We buy the umbrella named insurance as we know bad times are there - accidents, health issues, home repairs, etc. Though many might see this as pessimistic to dwell on uncertain future, there is no harm to prepare for any devastating surprises. When disaster strikes your home, just repairing the structural damages doesn’t end the chapter. Rather, how much secure you feel in your home is as much as important. When disaster strikes, the mental peace that we find in a sense of stability is much more important than any monetary satisfaction. Here are 5 things you should know about homeowner’s insurance:

1) What does your homeowner’s insurance policy cover?

A regular homeowner’s insurance policy offers compensation for damages to your property due to storms, fire, thefts, and vandalism. Just like renters insurance, it also offers liability coverage in case someone is hurt while on your property and decides to sue. A homeowners’ policy also covers for shelter costs in case you’re displaced from your home temporarily. Again, if something gets stolen from your car, the auto insurance policy won’t cover it, but your homeowner’s insurance policy probably will.

2) What your homeowners’ insurance policy doesn’t cover?

A standard homeowner’s policy always have exclusions. These include earth movements (landslides, earthquakes, sinkholes), government action, nuclear hazard, power failure, war, faulty zoning, bad repair or defective maintenance and flooding. Though windstorms are usually covered, you’ve to buy a separate rider for tornados, hurricanes, and floods in some high-risk areas.

3) What actions can lower your premiums?

Having a burglar alarm in your home is good as it makes you alert in case someone breaks in. But did you know that this could also help you lower your insurance premiums? The same goes for a smoke detector. According to insuranceagents.com, you can reduce your premium by about 5% if you install something as a simple as a deadbolt, and up 15-20% for a burglar alarm system. Insurance companies determine your monthly premiums based on the risk propositions you carry. So, if you can reduce the risks you possess through enabling some smart preventive measures, you can lower your rates.

4) How replacement coverage differs from market value.

If you are a homeowner, you should know how ‘replacement cost’ gets calculated with ‘market value’. While replacement cost covers repairing or replacing your entire home, market value is the price you’d get by selling your home and accompanying land in its current downtrodden condition. It’s always good to buy a policy based on market value as you’d get at least partial expenses in the event of a serious disaster.

5) Why you should never wait for a claim.

While you purchase a home insurance policy, make sure you ask about the time limits within which you need to file a claim. If you wait too much before filing a claim, you can become ineligible to file a claim, and hence, will lose the entire compensation you were eligible to receive.