The cost of any home insurance policy depends on several factors. The main one will be the amount of coverage that you want to have. This is the amount of money you think will be enough to cover all of your expenses and the cost of the home and its contents if anything happens to destroy the home. You need to have replacement cost included in the policy so that you will receive the actual amount of money you paid out, instead of a market value for everything, which will be substantially less money depending on its age. You should determine the amount of coverage you need by taking an inventory of everything in the home – furniture, appliances, clothing, jewellery and anything else that you want to include. This is something you should do whether you have a separate home or whether you have a cop-op or condominium.
Typically insurance covers the cost of damages to your dwelling and its contents. If you have a condo, you will look at the contents, because the walls and usually the roof are covered under the building insurance. This is standard insurance and is called a Broad Insurance form. It does not cover damages caused by certain things, such as floods, earthquakes or acts or terrorism. If you live in an area where you think you might need this extra coverage, you can have what is called a Special Insurance Form. If you own any articles of furniture, clothing, jewellery or antiques, you should have those covered under a special insurance where you have them listed separately along with their value. It really helps if you have an appraisal form fro each of the items that you list. It will also make it easier when it comes to making an insurance claim for any of these items. Any special insurance is expensive and will drive up the total cost of the policy premium.
The amount you have to pay for insurance also depends on the amount of deductible to choose to have. The deductible is the amount of money that you will have to pay yourself towards the costs of repairs or in the event of a total loss, the amount the insurance company will deduct from the amount of your settlement. The lower the deductible you choose to have, the higher your premium will be. For example, a deductible of $250 means that you will pay the first $250 toward any repairs. The insurance company will pay the rest. Since it doesn’t take very much damage in a home to amount to more than this amount, the insurance company will feel that it is very likely that they will have to pay out money. If on the other hand, you choose a higher deductible, such as $1000, the premiums will be lower because their is less chance that you will even bother to make a claim because you can handle the costs of repairs up to this amount.
When you are looking for a home insurance policy, you should shop around with the different companies that offer the type of insurance you need. Some companies will not offer condominium insurance, for example. You should request a free quote of what the premium would be for the coverage you want and compare what the different companies can offer you. This way you are assured of getting the lowest price. When you are buying insurance, you can choose several methods of payment. You can pay it all in advance in a lump sum, pay it in two instalments or choose to have a monthly payment. If you choose the latter, finance charges will be added to the total cost of the premium.
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