Your House Should Be Fully Covered
The coverage on the insurance policy should reflect an amount that can adequately take care of the cost of rebuilding and refurbishing your entire house in the event that you lose it completely. Insurance companies may use a cost estimator to ascertain the cost replacement estimate, but you can have a home builder assess your home and furnish you with an estimate of the rebuilding cost. This should include the unique and/or expensive details of your home (if there are any). You do not want to end up being underinsured. Once you have the estimate for rebuilding, you will need to figure out which coverage to take. The choices are:
- Guaranteed Replacement Cost Coverage – The insurer bears the cost for the rebuilding your home in spite of that cost. Very few insurers are offering these policies now.
- Extended Replacement Coverage – This coverage involves the capping of the payout you would receive to approximately 125% of the insured value of your home.
- Inflation Guarantee (or Guard) – This is a feature that ensures the insured value of your home stays on par with that of the marketplace.
Strive to get a reliable appraisal and extended replacement coverage along with an inflation guarantee. These will place you in a good position.
Home owners are sometimes caught off guard by third party claims for an injury someone incurred at their house or damages they caused to their neighbor’s property. These things happen, so protect yourself by ensuring your home insurance includes a liability insurance policy. Liability insurance gives the homeowner protection against any third party claims of damages and personal injury that occur on their property or are caused by them. Someone may fall and hurt themselves while on your property, or in the case of neighbors living in close proximity, your child could be playing and accidentally cause damage to their property. Liability insurance takes the burden of paying for medical bills or damages from your pocket, as the insurance company will take care of it.
Get Additional Coverage for Your Valuables
The standard insurance policy covers you home and possessions against eventualities such as natural disasters, fires, theft and accidents, but only does so indirectly for certain assets. Homeowners are sometimes caught off guard when they suffer from a disaster and realize they will not receive full compensation for certain valuables inside the house. The standard HO-3 policy takes care of the structural aspect of the house along with its contents, but there is limits the compensation for expensive possessions such as artwork and fine jewelry. You can obtain full coverage for them by paying a little extra on your policy each year.
Home insurance keeps your home safe even while you are away on vacation. This gives homeowners a sense of protection. Make an inventory of your property, as this will save you the time and expense if the need to file a claim arises.