Things happen to your home. From weather to theft, it is important to be covered. That is why homeowner’s insurance is an important tool. With insurance, it is important to understand what is covered and what isn’t so you don’t get caught off guard. “Homeowners insurance helps provide financial protection for your home and personal belongings” (Allstate).
There are typically three areas which cover you and your home. Property damage covers repair or replacement costs for the structure of your home. “Liability protects you from lawsuits alleging bodily injury or property damage caused by you or someone else in your home.” (Elite Informer) If you’re temporarily unable to live in your home, loss of use helps to pay for those costs of additional living expenses.
“A basic rule of thumb is to make sure you buy enough coverage to replace your home and its contents, as well as to cover additional living expenses if you have to move out.” (US News) There are two basic types of homeowners insurance policies. Actual cash value policies take into account depreciation and inflation. Replacement cost policy replaces items with new/comparable items without accounting for depreciation or inflation.
With insurance comes exclusions. For example, homeowners insurance typically doesn’t cover floods because of the great cost that comes along with this disaster. “Floods” just aren’t acts of god in the insurance world. A flooded basement due to a failed sump pump or leaking bulkhead are two examples of disasters often not covered by insurance. Talk to your insurance agent today to understand what is and isn’t covered.
Deductibles need to be taken into account when dealing with insurance as well. Usually starting around $500, the deductible is what you pay out of pocket before insurance kicks in. There is also a limit to your policy that should be taken into account. It is important to talk to your insurance agent should you have any questions regarding coverage or other insurance questions. Don’t know of someone in the business?
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