Whether you own your own home or whether you rent, you should have a homeowner’s insurance policy. Your home and its contents are an important part of your life that can become damaged or totally destroyed by circumstances completely out of your control. If that happens and you do not have home insurance, then you are left with nothing. With a homeowner’s insurance policy, you will be able to recoup your losses and get started again.
There are several things you need to do when purchasing a homeowner’s insurance policy. You have to know how much coverage you need. This is the amount of money you would need to receive to replace everything you lose – the home, your clothing, furniture and appliances as well as other personal items. Too many people do not fully understand or read their insurance policy and find out too late that they do not have enough coverage or no coverage for whatever event caused the damages they have.
Your insurance policy will refer to property in two different ways; Real property is the structure of your home and any outbuildings that are on your property, either attached to your house or separate buildings. You can estimate your real property by determining what the market value is – what would you get for it if you were to sell it. If you have had the home for several years, this amount will usually be much higher than what you paid for it and will give you an example of what it might cost you to replace it. Another way is to have replacement cost – what would it cost you to replace the home at today’s prices. Replacement cost is the one used most often because you are guaranteed to get enough money to rebuild your home the same as it was before it was destroyed. There is an easy method you can use to estimate the replacement cost you should have on your insurance policy. If you multiple the square footage of your house by how much the building material costs per square foot, you will come up with a pretty comparable figure.
It is much harder to estimate the price of your personal belongings. Personal property refers to your clothing and furniture. When you are determining how much coverage you need, you should do a home inventory. This is a list of everything that is in the home, a count of clothing and other personal items. You can have a written record or a photographic or videotaped record. This is something that the insurance company will advise you to do so that you will be well protected. If you have any items that are valuable they should be insured separately under the homeowner’s insurance and if you have any appraisal certificates, they should be included.
If you have your home insured, the insurance company will pay the amount of coverage that you have on the policy, less the deductible amount. This is the amount that you are responsible for paying yourself. In most cases the amount of personal property paid out in a claim is for 50% of the coverage you have on the structure of the home. If you are covered for vandalism, most insurance companies won’t pay out on the claim if the home has been empty for 30 days or more or if part of your home is used as a office for a home based business. Any equipment that is used for business must be insured under a different section of the policy. This is why it is important for you to know what is contained in your homeowner’s policy as all policies are not the same.
Currently Indexing Over 75 'BluePages' Covering 1,000+ topics!