Homeowners insurance provides financial protection against damage to your home due to disasters (which is why Climate Change Can Affect Your Home Insurance Policy). It typically covers your possessions as well (although some items might require Personal Property Floaters). Interestingly enough, it also includes damage caused by domestic pets. Moreover, you can opt for package policies, which combines property and liability insurance into one. But be sure to brush up on he basics of homeowners insurance before settling on a policy, especially if it's your first time purchasing one.
1. Different Damage, Different Policies
Homeowners insurance typically covers damage caused by the majority of disasters, but there are some exceptions, such as poor maintenance, earthquakes, and floods. For certain risks, you need a specific form of coverage, such as earthquake insurance, while maintenance issues are literally your own problem.
2. Coverage for Personal Belongings
This typically includes clothes and furniture, and it can also range from electronics to sports equipment. The policy offers protection from damage due to fire, theft, and other listed perils. However, coverage for more expensive items, such as jewelry, often have a limit. In sum, you may need to shop for specific coverage options to protect against certain hazards unique to your situation.
3. Shop Around a Little
You should contact a minimum of three companies to compare coverage and rates. This is because you may need to purchase more insurance with one specific company, but you may not have to with another. It's best to shop around to see what you've got to work with.
4. Ask Questions About Your Coverage
Before you set anything in stone, be sure to ask the pertinent questions about the coverage and whether it will be enough. For example, if you own a sizeable property, does it also cover your property outside the home.
5. Completely Understand the Details of the Policy
Before you sign anything, make sure you understand every aspect of the policy. For example, this could include what is deductible and what is not or what your liability coverage entails.
6. Escrow Your Payments
This means that you pay premiums and property taxes through your escrow account like with mortgage payments. Lenders actually prefer if you pay through escrow.
7. Ask About Discounts
Asking your agent about any available discounts can lower the rates. For instance, having an alarm system lowers the risk of break-ins and thefts, which may translate to a lower premium for you.
8. Carefully Read Your Policy
This is different from asking questions and understanding everything because you must ensure that your responsibilities and rights are crystal clear in the document as it is a legal contract.
9. Finding the Right Shopping Place
You need to know where to look for reputable companies. Start by asking friends and family who they are insured with and where you can find them.
10. A Cheap Price Tag Isn't Always the Best
If a company offers a cheap quote, find out why. You may find a great deal, but most of the time, you get what you pay for. Don't settle for less if you don't have to.
In sum, evaluate your situation to figure out what you need and don't need before contacting insurance companies and shopping around. This will save you time and money. Keep all of these simple tips in mind to settle on a policy worth your while.