Homeowner's Insurance 101: Getting The Policy That You Need
As a home buyer, one of the things that your mortgage lender is going to require is homeowner's insurance. You'll need to provide your lender with proof of this insurance in order to close on the home sale. If this is your first time getting a homeowner's insurance policy, it's important that you are adequately prepared for the process. Here's a look at a few important things to think about when you're shopping for homeowner's insurance.
Opt For Replacement Cost Coverage
When it comes to the actual structure coverage for your home, you'll be asked to choose between replacement cost and market value. Market value reflects what your home would sell for, while replacement cost reflects what it would cost to actually construct the home. That's why you should always opt for replacement cost coverage instead of market value. This ensures that you get sufficient coverage for rebuilding your home as it was before the loss.
Be Mindful Of Your Deductible
The deductible assigned to your homeowner's insurance is the amount that you're responsible for paying when you have to file a claim. Many homeowner's insurance buyers don't think about this deductible and just take the first one that the insurance agent offers, but you should give your homeowner's insurance deductible more thought. After all, you need to be sure that your deductible is one that you can afford, and is reasonable for your household budget. Talk with your insurance agent about your financial situation to help you make this choice.
Ask For Sewer Backup Protection
Few things can damage your home the way that a backed-up sewer system can. Unfortunately, many insurance companies don't cover this type of damage without an additional endorsement on the policy. You'll have to talk with your insurance agent about the additional coverage option, but most companies offer the inclusion for a small additional premium each year. It's worth this investment when you think about how much money it could ultimately save you.
Understand The Importance Of Sufficient Liability Coverage
Liability insurance provides you with coverage and protection for anything that you might be found liable for. Whether it's your dog biting a visitor or someone falling on your property, you should be sure that you're protected in case the other party files a claim. Don't underestimate the importance of this coverage, and make sure that you get as much liability insurance as possible.
These are some of the things that you need to know before you buy homeowner's insurance. The more you understand, the easier it is for you to get the coverage that you need.
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