Choosing the best homeowners insurance policy for yourself and your family may seem daunting, but it is worth the time and effort you will put into customizing your policy.
As a first-time homeowner or homeowner with an existing policy that needs to be updated, the unknown can be scary. But, you will have less to worry about when you reach out to a professional and knowledgeable insurance agent.
Your home will likely be your most valuable asset, which makes it essential to protect it. It is unlikely that you would be able to pay out of pocket if a disaster occurred. Even if you could, why spend your savings on an accident that insurance could easily cover.
Why have homeowners insurance?
Purchasing a homeowners insurance policy is not required by law, but most mortgage lenders will require you to have some type of coverage on your home. Doing this protects their financial interest in your home and property.
Even without it being a law, it is still a wise decision to buy protection for your home. It can save your pocket if a natural disaster destroys the structure of your house or if someone slips and falls on your property.
While no one wants to anticipate the worst, being prepared is the only way you can guard against financial risk.
What does homeowners insurance cover?
Homeowner’s insurance can help protect your home, finances, belongings, and legal expenses if an accident happens on your property.
There are six standard types of coverage.
Covers damage to the home and attached structures, such as a porch, attached garage, breezeway, roof and walls, flooring, and built-in appliances.
Pays for, replaces, or repairs belongings you store inside your home if they are damaged, destroyed, or stolen.
This part of your policy covers stand-alone structures on your property, such as a shed, fence, detached building, or permanently installed pool.
Loss of Use
If you are forced out of your home, it helps cover temporary living arrangements while your home is being repaired or rebuilt.
If an injury occurs on your property and you are being sued, liability protection can protect you.
Pays for the medical bills or funeral expenses of a person who is injured on your property.
What homeowners insurance doesn’t cover
While a standard insurance policy will cover many aspects of damage to your home and property, there are some important exclusions.
The most common exclusions are earthquakes, water damage, flooding, acts of war (nuclear hazards), damage due to negligence, risky items (trampolines), and valuable items (jewelry and artwork).
Add-ons when you need more coverage
Fortunately, there are ways to save yourself the heartache of losing assets and valuables due to exclusions. You can customize your homeowner’s insurance policy by adding additional types of coverage.
The most beneficial add-ons include:
- Sewer and drain backup
- Service line protection
- Ordinance and law protection
- Identity theft
- High-value item coverage
- Additional replacement costs
- Mechanical breakdown coverage
- Personal injury
- Personal umbrella protection
Determine how much insurance you need
Depending on how much you want to spend and how much protection you need, there are typically three levels of coverage.
Actual Cash Value
When your property is insured for its actual cash value, you will receive what your home and belongings are worth at the time of damage, not what you paid for them. This can be determined by subtracting depreciation from the replacement cost.
You would receive the actual cash value for your home and belongings. Meaning you could repair, rebuild, or replace what was damaged or stolen for up to its original value without subtracting depreciation.
Guaranteed Replacement Cost/Value
Guaranteed or extended is the most comprehensive coverage, which pays for whatever it costs to repair or rebuild your home, even if it’s more than your policy limit.
While it may cost more, some advisors recommend this level of coverage since the market fluctuates. It’s beneficial to purchase more than what your home is worth at the time of purchase since years down the road, it may cost much more to have it rebuilt.
Invest in your home with Frost & Remer
At Frost & Remer, we understand how important it is to protect your home, property, and most valuable assets. Our agents strive to meet our client’s needs and get them the best coverage at the best price.
We offer multi-policy and multi-car discounts for good students, teachers, and those who have served in the military.
If you would like to receive a free policy review and full-risk assessment, schedule a virtual appointment with us at any time. We can discuss bundles, discounts, specialized add-ons, and any other concerns you may have during your meeting.
Contact one of our professional agents today if you have any immediate questions.