Many people report that they are unsure of what is in their homeowner’s insurance policy. Although they likely checked to find out which company had the best deal for insurance, they didn’t read the actual policy to find out what was included. Whether a person is interested in purchasing a new policy or they would like to determine whether they should renew their current policy, reading a Guide to insurance: Home insurance will help them understand what to look for beyond the price of the policy.
Three Different Types of Policies
There’s typically three different types of insurance policies for homes. A person should understand what each of them entails in order to determine which one is the right option for their needs.
- Basic – Basic insurance is the least expensive, but it only covers the home itself and none of the interior contents. If the home is destroyed in an emergency, the homeowner will be responsible for replacing furniture and other belongings.
- Standard – This insurance company only covers perils that are named in the policy, but nothing else. This can be a great way to get a policy without spending too much, but the homeowner will need to ensure that anything that could possibly happen to the home is covered or they could end up covering some emergencies on their own.
- Comprehensive – This is the opposite of a standard policy. It covers everything conceivable except for a certain list of exclusions. The list of exclusions is different for every company, but often the person can purchase extended coverage to add on the exclusions that cover something that may apply in their situation.
Ensure Policy Covers Everything
It’s extremely important to read through the policy carefully to determine what is does and does not cover. If something happens that is not covered by the policy, the homeowner will have to cover that emergency on their own. For instance, if flooding is not covered and the home floods, the person will have to pay for a water damage service, replace any damaged parts of the home, and replace any belongings that were damaged in the flood.
Amount of Coverage
Most homeowner’s insurance policies include a guaranteed replacement cost so there’s no need to worry about the actual cost of replacement if something does happen. The value of the policy is going to be different from the market value of the home. The market value includes the land, but an insurance policy will only cover the cost of rebuilding the home. This isn’t going to include the land, so it can be significantly less than the market value.
Find Ways to Save on the Premiums
Once a person finds a few policies that are going to include everything they need, it’s time to take a look at the cost. In some cases, they may worry about how high the cost is. It’s important to get as much insurance as possible to ensure the home is protected no matter what happens, but it’s also important to avoid going over the budget.
The person can enquire about various ways to reduce the insurance premium. Most insurance companies offer discounts for a variety of things. For example, the policy may reduce the premium if the home has additional security features to prevent a burglary or if they have another insurance policy with the same company. It’s always a good idea to ask about discounts and to see what is needed to be eligible.
These are the basics a person should consider when they’re looking to renew or purchase home insurance. If the person already has a homeowner’s insurance policy, they can use the information here to determine if it’s going to provide enough coverage before an emergency occurs. If they’re ready to consider a renewal or looking for a new policy, they can use the information to find the best insurance policy for their needs and their budget.