You have just bought you new home and are looking around to see what kind of home insurance is available. You know you need some kind of home insurance protection, but you don't know exactly what you should be looking for in an insurance policy. Here are some tips to help you in searching and purchasing the right policy.
The first thing is to know the basic things covered by an insurance policy. Most policies will cover theft, fire or lightning damages, smoke damages, frozen pipes and ice or snow. Anything other than these, such as flood or earthquake insurance policies, can be purchased separately or added to the insurance premium.
Insurance also provides coverage for liability claims, medical payments to third parties and legal costs if a lawsuit is brought against you. The most common amount of liability coverage in a home insurance policy is $100,000. You may need more than that amount depending on your circumstances.
What's Not Covered?
Make sure you know what is covered in your policy so you won't suffer a loss in case of an accident. Typically floods, earthquakes, nuclear accidents and terrorism are not covered in a normal home insurance policy. You can, however, purchase specialty policies or endorsements to cover these kind of events.
Protecting Personal Items
Most insurance policies limit coverage for hard-to-replace or high-price items. Additional endorsements may be purchased for items such as, engagement rings, fur coats, guns, antiques and other valuables. You will need to have an appraisal for each personal item you intend to insure.
How Much Is Enough?
Most mortgage lenders require a homeowner to purchase a minimum amount of insurance (typically equivalent to the appraisal of the home). This may not be the amount you need. Some people find out how much it would cost to rebuild their home and purchase home insurance for that amount.
Choosing A Deductible
To save money you can choose a deductible of $250, $500, $1000 or even more. In the event of an accident or loss of personal property, insured under your insurance policy, you will be required to pay the deductible amount before home insurance takes over. Having a higher deductible can lower your monthly/annual premium.
Premium Discounts
Make sure you let your insurance agent know if you have a home security system. This can save you money on your home insurance premium. You can also receive insurance discounts if you live near a fire department or hydrant, own a newer home, own a home built from fire resistant materials or get your auto insurance from the same company.
Shop Around
When selecting insurance policies it's good to shop around. Insurance agencies have different quotes for different kinds of home insurance. Evaluate each policy and make sure it has the coverage you want for your home.
Making a home insurance policy purchase is important to you and your future. These tips should help you get started when looking around for the best insurance policy.
By John Ivie