Homeowners Insurance

Your home is generally your greatest asset and one that you can’t afford to loose so make sure you don’t skimp on your homeowners insurance.

Unlike car insurance it is not illegal to own a home without taking out homeowners insurance but if your home is financed in any way by a third party lender then the likelihood is that you will have to take out homeowners insurance at least to cover the building.

Homeowners insurance is normally split into two basic categories, buildings and contents. Some people take the risk and don’t take out any insurance against the contents of their home but they probably have never worked out how much it would cost to replace everything they own.

Others don’t pay much attention to the amount of liability cover that is included in their homeowners insurance. For me this is a big risk. If someone has an accident in your home they will be claiming against your homeowners insurance and if you don’t have the cover they could then be looking to you for compensation!

The element of your homeowners insurance that relates to the building covers you for the cost of rebuilding your home and other buildings (that you own) in the immediate vicinity of your home (such as garages and summer houses) in the event of fire or other disasters. You need to make sure your insurance covers you for the full cost of clearing the site and rebuilding your home. Always check out the insurance policy small print to make sure you are totally clear as to what your basic homeowners insurance doesn’t cover which will generally include damage due to natural disasters such as flooding or earthquakes.

You can purchase flood insurance separately, through your homeowner’s insurance provider, but the policy will be with the Federal Flood Insurance Program.

The contents element of your homeowners insurance will cover you for everything inside your home including carpets, curtains, clothes and furniture (anything that isn’t classed as structural). Your homeowners insurance will also usually cover you for lost or stolen cash and credit costs and loss or damage to your personal belongings while off the premises. It’s really easy to underestimate the amount of homeowners insurance you require, for contents, so the best way is to do a full inventory of everything you own.

As stated previously, never leave yourself exposed by not ensuring that your homeowners insurance covers you to a sufficient level for third party liability. If someone trips and falls down the stairs you’ll need good insurance and if you don’t have pet insurance then liability protection could be just what you need if you pet damages someone else’s property.

If you lost your home for any reason your living expenses would significantly increase particularly in the early weeks when you are living in hotels and eating out. Make sure your homeowners insurance covers you for such costs, the level of insurance varies depending on which homeowner’s insurance policy you take out so pay particular attention to the benefits you will receive when getting quotes for your homeowners insurance.

If you are renting your property you need to take out renters insurance rather than homeowners insurance. As you don’t physically own the property you will not be able to insure against damage to the building, only against damage to your own personal possessions.

The cost of homeowners insurance varies depending on such things as level of cover, size of house, type of house, value of personal possessions and the area in which you live. You will need to get a homeowner insurance quotes to get a full understanding of how much your homeowners insurance will cost. Always get several quotes as shopping around could reduce your annual cost of homeowners insurance quite dramatically and, as with most insurance nowadays, shopping online generally results in some of the most competitive prices.