Your home is probably going to be your single most important purchase in your life, you spend months searching for the perfect place so it makes sense that you would be just has careful when it comes to your home owner insurance.
But what is home owner insurance?
As the name indicates, home owner insurance will insure your home against most disasters. But there are some pitfalls to lookout for.
What does home owner insurance cover?
Good home owner insurance will cover everything in your home as well as your house itself.
Your home owner insurance should at least:
–Cover the price of the house should you need to re-build it, (about the current value of the house).–Cover at least your mortgage.
–Inflation guard, the total cover should increase every year in line with inflation.
–Does your home insurance offer temporary accommodation after a disaster?
–If you rent part of your house, your home owner insurance should cover your loses, (even if your part of the house is still habitable).
–Cover 50% of the value of the house as contents.
–What are the requirements you need to have along with the insurance? Smoke detector? Burglar alarms?
–Liability cover, (the cover should be fairly high due to the cost of most court cases).
–Pet cover? If your pet causes damages, to property or to another person, are you covered, are you covered against legal actions?
What else should you speak to your agent about home owner insurance?
Bear in mind the property itself, if you have an old, special home, you might want it repaired at all costs rather than a cash payout. Or if it is beyond repair, does your home owner insurance offer to purchase another, similar, home?
Most home owner don’t offer flood or earthquake cover, are you in a high risk area? Can you afford not to have such insurance?
After a disaster, building materials are usually more expensive, does your home insurance take this into account?
Do you need to take an inventory of your house content? If you have some special items that are likely to be more expensive/valuable, can your agent offer you a floater/endorsement on your home owner insurance?
How can your home insurance be cheaper?
You also need to ask your agent for special deductions on your home owner insurance.
–If you have a smoke detector.–Fire alarm.
–If you have more than one property.
–Will your home insurance be cheaper if you had some of the above?
Want more protection?
For greater peace of mind you can get an excess liability or an umbrella insurance. First if offers you greater financial coverage and secondly it offers you even more protections that are not always associated with home owner insurance, for example invasion of privacy, slander or even libel.
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