Image Credit: California commercial property insurance
If you think that buying homeowners insurance is not too hard, wait until you start researching potential companies and their packages. Sooner or later, you will feel overwhelmed by the wide plethora of opportunities, not to mention about both special offers and restrictions. The necessity of this insurance is obvious because it practically protects the most important investment in your life. But then, the confusing market makes it easy to purchase the wrong plan. Apart from some research, paying attention to a few helpful tips and tricks will open a lot of doors overtime.
What does the homeowners insurance cover?
A typical homeowners insurance covers the dwelling, as well as other more or less relevant buildings on site. If you have a shed, it will be included too, yet it needs to be mentioned. The same goes for external garages, summer kitchens and other similar constructions. The contents of these buildings are also covered, as well as potential injuries occurring on site. For example, hiring a roofing contractor might provide a better peace of mind if you are insured. If a worker falls off the roof and gets severely injured, you will not be held responsible. The policy will take care of everything for you.
What things are normally not covered by the homeowners insurance?
Different homeowners insurance policies come with different types of coverage. Most of them will not cover floods, yet some of them will. Windstorms are normally covered, yet you may run into some exceptions as well. Mold damage is another fishy element, so double check it. Collectibles, cash and jewelery are limited to a particular point. Of course, you have the possibility to increase this limit, but it also implies spending more money. There are not too many individuals who choose to insure cash though.
Considering deductibles and their limitations
A lot of insurance firms offer the possibility to reduce the expenses by having higher deductibles. The limit for discounts is not so high though. Plenty of companies will offer discounts for $500 deductibles. The higher the deductible is, the more money you will save. You can go up to $10,000 or even more. If you got the home with a mortgage, you might want to double check this aspect with the lending company. For example, some lenders do not allow these deductibles to exceed $1,000. It is not a general rule, but it is definitely worth checking.
How much coverage do you really require?
When getting a homeowners insurance, you should know that you are insuring the building and not the actual area. In other words, you are very likely to get a lot less than what you paid for the home. Insurance companies will also provide specific estimates regarding the value of your home (in their vision). The good news is that you can opt for a higher coverage. If you opt for a high 150% coverage and your home is estimated at $200,000, you will receive $100,000 more if something goes wrong. Most specialists recommend a 200% coverage though.