Whether you own a home or are planning to buy a new one in the future, it is wise to get it covered by homeowner insurance. Insurance will cover your home from every possible calamity and unforeseen disaster, from burglary to storms. Having your home covered can help save you money if it is in need of maintenance or if you would like to avoid paying unnecessary damage expenses in the future. It is very important for you to have homeowner insurance if you are still paying off your home loan or lease.
It is quite possible to build a house without taking advantage of homeowner insurance. This could, however, be a risky proposition, especially for those who have a mortgage to pay off. One never knows when accidents will occur and it is always best to be prepared for them. A property insured after the damage has occurred will not be compensated by the policy.
Common Types of Homeowner Insurance
You can narrow your search for the best insurance policy by considering a few general factors about your home. Most policies can be determined by the age of your home, your geographic location, the occurrence of natural disasters in your area, and whether you live in a safe neighborhood. There are six different types of common homeowner insurance that you can choose from, and it is helpful to understand what they are before you begin your search.
· HO-1 is a basic form of coverage. This type of coverage protects your home and personal property from incurring a loss due to damage caused by natural events such as wind, hail, lightning, and volcanic eruptions. You will also be covered for some unnatural events such as explosions, smoke and fire, riots or civil unrest, and vandalism, theft, or malicious mischief.
· HO-2 is a broader form of coverage as compared with HO-1. This policy includes snow and freeze, falling objects or electrical surges, and issues with heating, plumbing, and air conditioning in which damage is caused to your property due to water accidently being discharged from the systems listed.
· HO-3 is called special form coverage. This is the most common type of insurance purchased by homeowners. It will protect your home and personal property from any damage possible, whether the cause is natural or accidental, excluding damage caused by earthquakes, floods, war, or nuclear disaster.
· HO-4 is referred to as a tenant’s policy. It covers the same items as in the HO-2 policy but is designed for renters instead of homeowners.
· HO-6 is basic condominium coverage. In this policy, again, the same items are covered as in the HO-2 policy but it is designed for condominium owners instead of homeowners.
· HO-8 is insurance coverage for older homes with historical value. It will cover any repair or replacement with equivalent cash value for insured items or parts of the property so that you are not required to rebuild or replace said items.
Policy rates vary from place to place depending on various factors including climate, geography, and the proclivity for natural disasters. Thus, areas susceptible to natural disasters like hurricanes, floods and earthquakes will experience higher insurance rates as opposed to areas with mild weather patterns.
Carefully consider every possibility and calculate your expenses before settling on a policy. There are a few things that you should keep in mind before finalizing any deal, and you should always understand your policy thoroughly. You should know exactly which possessions and property you will be covered for and look for hidden clauses and conditions as these can prove to be highly inconvenient if left unnoticed. You want to be sure that there will be no misunderstandings should you face a time of crisis in the future.
Understanding Your Policy
When you are searching for homeowner insurance coverage, it is wise to go through as many offers and policies as you are eligible for. You should not settle for the least expensive policy, but choose one which meets your requirements for a reasonable price.
Understanding the difference between different coverage policies and what they entail is vital when trying to choose the best homeowner insurance to meet your needs. You can always consult an insurance agent who can help you evaluate your property and possessions and guide you toward the right policy for you.
· Coverage for possessions and properties will ensure that you are compensated in case of robbery, theft, or selfsame loss. Under this policy, insurance benefits will replace stolen goods and pay for any additional cost incurred to your property under the circumstances. Before choosing this type of coverage, it is advised that you make an adequate plan and draw up an estimate of the cost of your insured possessions.
· Under personal property coverage, you will be compensated for any loss of property with the equivalent cash value. It is important to note that under this policy you will be required to prove the value of your property with receipts or other valid proofs of purchase before being able to claim any money for your losses. You should not expect to receive the exact value of any old or already damaged property, such as a ten-year-old television set which you have no proof of purchase for. In this case, the insurance company is certainly not going to pay the market price at which the television was sold for ten years ago.
· Liability coverage makes sure that you are insured against any untoward financial crises arising from legal tussles. This policy aims to secure clients against legal loopholes or property damage. For example, if you get sued by your neighbor for damaging their property, liability coverage is going to help you out. This type of coverage makes sure you are secure in three ways: it will cover you against legal harassments, pay for property damages to others, and bear medical expenses.
Start Your Search Online
These days it is possible to get practically anything at the click of a mouse, including all of the information you need about homeowner insurance policies. If you are not sure about what kind policy to choose, simply visit the websites of various insurance companies which provide virtual guides to assist you in understanding which policies best meet your requirements. You will be guided through various cost-effective packages until you settle for the one you need. Additionally, you can look up various expert articles on insurance schemes and find out all you need to know.