Introduction
Home insurance is something most
homeowners take for granted, but it's actually a really important part of your
overall financial plan. One reason is because this investment provides you with
the financial protection you and your family need in case something unexpected
happens. For example, if you lose your income or property due to natural
disaster, windstorm, fire or theft — your home insurance provider will step in
to cover your losses. But there are also other reasons to calculate your home
insurance on a regular basis. Here are just a few reasons why:
When you ask most homeowners what
they're looking for in a home insurance policy, they usually want one thing: to
pay as little as possible. They want to save money on their insurance premium.
And while that's probably the case, it's only because they don't understand how
much they should be paying to get their property covered.
What
is Home Insurance
Home insurance protects your
dwelling from damage or destruction due to natural disasters, such as tornadoes,
earthquakes, floods and hurricanes. It also covers damage to your home caused
by theft, vandalism, fire and other disasters.
Your home insurance policy can help
pay for repairs if a covered event occurs. However, you may want to consider
additional coverage options that may be available at an additional cost.
How
Much Homeowners Insurance Do You Need
How much homeowners insurance do you
need?
When it comes to insurance, there
are two main questions you'll need to answer before purchasing it:
How much coverage do I need?
How long will I be covered for?
The first question is
straightforward. The amount of coverage you need depends on a number of
factors, including:
What type of property your home is
(e.g., single family or multi-family)
How many people currently live in
the home (or how many are expected to live there in the future)
The value of the property and its
location (e.g., a high-value home in a low crime area may require more coverage
than a low-value home in a high crime area)
When
Should You Recalculate your Home Insurance
When should you recalculate your
home insurance?
If you have a change in your
lifestyle, it's worth looking at whether your home insurance policy is still as
good as it was. Changing jobs or moving home may mean that you need to adjust
the amount of cover you have.
It's worth comparing quotes and
getting professional advice when you're considering making any major changes to
your home insurance.
What
To Consider When Buying Homeowners Insurance
Buying homeowners insurance is a
smart first step in protecting your home and its contents. Homeowners insurance
protects you from financial losses due to perils that could occur during a
covered period.
Here are some things to consider
when buying homeowners insurance:
What's covered? Your homeowner's
policy provides coverage for various perils that are covered under state law,
such as fire, lightning and windstorm; theft; vandalism; smoke damage;
accidental injury (including slip or trip); and more.
How much do I need? You can get
supplemental coverages — like "umbrella" liability, umbrella property
damage and vehicle replacement — from your homeowners policy if you have extra
coverage needs or want more protection than what basic coverage offers. Just
make sure the amount of premium doesn't exceed the value of your home (or its
contents).
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