Having homeowners insurance is an important part of owning property, as it can help to keep you financially covered in the event of a disaster. In addition to improving your home value after an incident, a good insurance policy will help you rebuild your life, so before choosing coverage consider the variables involved.
According to the Insurance Information Institute, when choosing homeowners insurance, the insurance representative should help you through the process. With this in mind, there are several key questions to ask them.
Start by asking how much it would cost to rebuild the home from the ground up in the event it was completely destroyed, says the industry group. A qualified insurance representative will have good knowledge of the local area and be familiar with general home prices in your neighborhood. In addition, they will be able to find out the costs of materials when the home was first built compared to costs now.
Most policies will cover damages caused by fire, hurricanes, lighting and hail, while coverage for other natural disasters such as flooding or an earthquake may not be part of a standard plan.
Additionally, you should find out how much your personal property is worth in the event of a total loss caused by theft or a disaster. Generally, homeowners insurance will cover personal property up to between 50 and 70 percent of the home’s value. In the meantime, keeping track of your possessions with a home inventory will make any claims easier to prove.
You should also consider how much liability protection you need, recommends the group. In the event someone is injured on your property, you may be held accountable depending on the circumstances. Having sufficient liability coverage will take care of legal fees or compensation awarded to the other party that you would otherwise be forced to pay out of your own pocket.
Meanwhile, finding out if you qualify for any discounts is a good way to save money on your homeowners insurance. If you have smoke detectors, a burglar alarm system or other added security measures to your home, your premium can be reduced since it is less likely you will ever have to claim losses. In addition, if you are more than 55 years old and retired, there may be even more discounts that you can qualify for.
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