Most people don't really think about what their insurance covers. They are more worried about the cost. However, there is more than one type of home insurance that they should consider.
Here are the types of insurance that you may want to get for your home.
Mortgage requirements. Before you start looking into insurance for your home, you have to realize that most mortgage companies require a minimum amount of coverage on your home. This usually includes hazard insurance, though they may also require liability.
You need to make sure that you have enough insurance to satisfy your mortgage company. Most people stop there, though you should really consider getting more (so that you are thoroughly protected).
Hazard insurance. Hazard insurance is used to protect your home against any damages that occur due to fires, theft, vandalism, and natural disasters such as storms.
Some insurance will pay the cash value of the damages while others pay the replacement value. The cash value pays what the property is worthwhile the replacement value pays you enough so that you can replace what is lost.
When pricing insurance, you will have to determine which you are willing to pay for. You will probably pay more to get the replacement value than you would for cash value. However, if you have to replace all of the appliances in your home, you are going to wish your insurance covered the replacement value. If not, you are going to end up paying out of your own pocket to replace them.
Liability insurance. Liability insurance is different. It covers the cost of accidents that happen on your property. It pays the medical expenses for accidents that occur at your house, up to a limit.
If you are going to have guests over frequently, you are going to need liability insurance. People are going to trip and fall, hurting themselves in the process. You shouldn't have to worry about getting sued if your friend breaks her leg at your home. Instead, the liability insurance will cover the cost and you don't have to worry about losing your friend over medical bills.
Special property insurance. Your homeowners' insurance covers most of the items in your home, with limits. If you have expensive jewelry or a lot of cash in your home, you might want to get extra insurance specifically for these items.
The same goes if you have a business in your home. Homeowners' insurance will not cover anything that is used in your business so if you have a home office, you are going to need some extra coverage.
Special exclusions. You may need extra protection for certain incidents that are not covered by your homeowners' insurance. The most common exclusions are flood and earthquake. You will need to purchase extra insurance if you are living in a flood or earthquake zone.
The same goes for older homes. If your home becomes damaged and will need significant rebuilding, you are going to have to bring your whole home up to code. This may include updating your electric, pipes, roof, and much more. Your insurance will not cover these costs because they were not damaged due to the storm (or other natural disasters). You are going to have to pay for these before your home can become fixed. There is insurance for this too.
The best way that you can make sure that you are properly insured is by talking to a professional. Contact us to make sure that you and your home is going to be protected in the event of a disaster, fire, theft, or anything else!