If you are a homeowner, you need to have home insurance. Standard home insurance should cover damage resulting from certain disaster, stolen or destroyed personal belongings, up to a limit personal liability, which protects you and your family from lawsuits as a result of injury or damage to you and your family can lead to another, and, medical expenses of non-family members injured on the property.
When buying home insurance, follow the steps below.
- Determine how much home insurance you need. You can calculate this by getting the replacement cost of your home. The replacement cost is the amount needed to restore your home. Acceptable insurance amount is 100% of the replacement value of your home.
- Estimate how much it would take to replace the contents of your home. To do this, make a written and visual inventory of your home. This will help you estimate the cost of each item inside your home. If you just do not have the time or patience to do this kind of equipment, you can hire a professional appraiser. As a rule, the standard home insurance policies have limits on compensation and replacement of personal property. If you own something particularly valuable, say jewelry or paintings, it would be better that you purchase a separate insurance policy for him.
- Consider buying additional coverage. Standard home insurance policy covers only certain disasters, including hurricanes, fires and lightning. However, they do not cover natural disasters, such as floods and earthquakes. If you live in an area where floods and earthquakes occur frequently, it would be advisable to purchase additional coverage for floods and earthquakes. Also, consider buying an extended replacement coverage for the contents of your home.
Choice between policy cash values and replacement cost policy. As mentioned above, the standard home insurance policy covers for a refund or replacement of personal belongings in the house. Insurance companies will give you the opportunity to withdraw cash for any stolen or destroyed property. It will be calculated as the original cost of the property minus depreciation. Replacement policy, on the other hand, reimburses you for the full current cost of replacing the goods stolen or destroyed. Nevertheless, you have to pay higher premiums if you choose this policy.
- Get home insurance quotes. You can do this through your insurance broker or online. Get several quotes from at least three different insurance companies with good financial strength rating. If you have car insurance, get a quote from your insurer, because it can give a discount if your purchase home insurance from him.
- Request for discounts. If you have recently installed a security system in your home or improved its plumbing and wiring, ask the insurance companies if you qualify for a premium discount.
- Choose your deductible. If you want to keep your premiums low, select a home insurance plan that has a higher deductible.
- Look at the policy. Notify your insurer if you have made any improvements to your home or buying a valuable asset for the home.