Owning a home comes with several responsibilities, such as homeowners insurance. It is a good idea to invest in homeowners insurance for various reasons. However, before you purchase the insurance, you need to understand the nitty-gritty because it involves many aspects. Knowing the correct information can help you make informed decisions. Below are things you should consider when purchasing home insurance.
Damages Covered By the Insurance Company
The main reason for taking homeowners insurance is to cover the costs that come with property damages. Life can be unpredictable sometimes, and you may not know what will happen to your home the next day. For instance, your structure can get damaged due to storms, floods, or fire. This will need huge money for the repairs or replacement.
If you have homeowners insurance, the policy can cover the cost of some damages, and this will prevent you from using money from your pocket.
However, it is worth noting that different insurers have different homeowner’s insurance policies. In this case, you need to find out the types of damages covered by the insurance company.
The policy should cover most elements in your home. This includes valuables and other personal belongings. Before taking the policy, it is best to take pictures and videos of your home’s current state to use them later when making claims for the damages. Below are the types of coverage to consider.
• Structural Coverage: This policy covers the repairs or reconstruction of the building caused by natural disasters such as fire, flood, storms, and explosions, among other elements. If your home gets damaged by these elements, you won’t have to worry about getting money for repairs or replacements. Your insurer can pay for the damages.
• Personal property coverage: Purchasing homeowners insurance helps you cover personal belongings. When someone breaks into your home or hotel room and steals your valuables such as firearms, jewelry, watches, among other valuables, you will raise a claim, and your insurer can compensate you for the losses. Remember, not all items are covered by insurance. In this case, you should inquire from the insurer about the items covered before you purchase the homeowner’s insurance.
• Additional living expenses: When your home gets damaged, you might need to stay in a hotel as the home gets repaired by your insurer. In this case, the insurer caters to the hotel’s expenses until your house is ready. Without the coverage, you will have to pay for your accommodation and other related expenses. You’d want to know the extent to which your insurer covers for the additional living expenses to enable you to make informed decisions.
• Personal liability coverage: As a homeowner, you are liable for any injuries on your property. When a visitor comes to your home, they can slip and get injured. Also, when your dog bites a visitor on your property, you be held liable. You will need to cater for the medical expenses and lost wages, among other costs, until the person gets back on his/her feet. However, if you have personal liability coverage, your insurer will cater for the expenses incurred, and you won’t have to worry about paying medical bills or other costs.
• Additional coverage: Some insurance companies offer additional coverage, which allows you to adjust your original policy to cover more elements that were not in the policy. Such elements include equipment breakdown, ceilings, floors, water backup protection, walls, and service line coverage, among other items. It’d be best to ask your insurer about items considered for additional coverage to help you make informed decisions.
Consider Different Types of Insurance Companies
There are different types of insurance companies that offer homeowners insurance, and each insurer has specific requirements. Before purchasing homeowners insurance, consider shopping around for several companies and choose one based on your needs and expectations.
Begin by checking companies that are within your budget limits. Some charge higher premiums than others based on various circumstances.
As you shop around for different insurers, check the types of services offered under homeowners insurance and compare them with the prices and personal needs. Below are additional factors to put at the back of your mind when shopping for an insurance company.
• Compare costs of each insurer per state to prove the legitimacy and creditworthiness.
• Visit each company’s website to check the rating per state and customer views.
• Investigate the company through reputable credit agencies that track customer complaints.
• Check the consumer retention rate and annual reports of the company.
• Obtain multiple quotes from different insurers showing the services offered.
• Instead of focusing only on the price, consider the main elements such as insured services and limits.
• Ensure you meet with an independent agent who specializes in homeowner’s insurance.
Check the structure of your house, personal belongings, potential liabilities, and other living expenses. For instance, if you live in a flood-prone area, it’d be best to purchase your coverage from an insurance company that offers relevant coverage because not all insurers cover flood damages.
Once you put together all your needs, you will be able to settle for a suitable insurance company worth a bang for your buck.
Understand the Claim Process
When your home gets damaged due to natural disasters such as fire, floods, storms, and other elements, you will need to claim compensation from your insurer.
The company can compensate you for the damages and restore your property within the shortest time possible. However, it is best to understand the claim process before purchasing homeowners insurance.
Find out if you will receive the entire claim amount or not. If the insurer will pay part of the amount, ask how the claim is calculated and what fraction you will be expected to get.
Also, ask if the company will pay you everything you’ve lost or part of what you lost.
Remember, some insurance companies allow you to make insurance claims on their website or initiate the claim via a phone call. Ensure you ask your agent any questions to find clear answers that can guide you when filing claims.
Additionally, some insurers offer cash value of the damaged or lost possessions as long as you have the receipts, videos, and photos to prove your claim.
You should also confirm how long you will stay in a hotel when your home is under renovation after a natural disaster. Never assume anything until you seek clarification from an insurance representative.
The Bottom Line
Using the information above can help you find the right homeowners insurance based on your needs and expectations. The most important thing is to take time shopping for various insurance providers instead of rushing through the process. It doesn’t matter how long it takes you as long as you get the right insurance company with appropriate services worth a bang for your buck.
