HOMEOWNERS Insurance Policy
While your home may be one of your most significant assets, it is also can cause substantial financial loss. Everything from home-related liability issues to damage to the home, loss of personal contents in the home and more can wreak havoc on your finances. Homeowners insurance gives you an effective way to protect yourself against a significant loss event. This type of coverage is often required by your lender if you have a mortgage, and it is also beneficial even if you do not have a mortgage requirement for it.
Each home insurance policy may be different in various ways, but most include a component for liability losses, property damage and personal contents. Liability issues may develop if someone is injured on your property. You may be responsible for any legal fees, medical expenses and more related to the event, and your homeowners insurance policy may pay for these expenses up to the terms of your coverage. Your policy typically defines the causes of property damage that are covered, but some policies cover all damages except those that are specifically excluded. You should read your policy terms carefully so that you understand the inclusions and exclusions. Some policies require you to purchase riders separately for things like mold and water damage. Personal contents coverage, such as to replace any furniture or electronics that are damaged, is usually also included. However, you can establish a coverage limit at your discretion.
If you are setting up a new home insurance policy, it is wise to pay attention to the deductible amount. For each claim that you file, you will be required to pay this amount. Commonly, a deductible is equal to one to two percent of the home’s replacement value. This can be a rather large and even unaffordable amount in some cases. You can usually request a lower and more affordable deductible, but be aware that this typically results in a higher premium amount. You need to be able to file a claim as needed, but you also need your monthly or annual premium to be affordable for your budget.