Are you a new homeowner looking for ways to safeguard your investment? There’s a lot you can do but home insurance may be your best option.
In the United States, about 85 per cent of homeowners have homeowners insurance. The average cost of a policy is $1445 annually. Even though it is not a legal requirement, it may be a condition when getting a mortgage.
A home insurance policy will protect your home, valuables, and other structures on your property. There are lots of insurance providers in the country and it is easy to find coverage when you need it. Here are a few facts about home insurance and reasons why you may need one:
Limits and Deductibles
Home insurance policies have limits. You cannot receive more than a specified amount for your claim. When choosing your coverage limits, there are a few things to consider. They include the possible cost of reconstruction and the cost of replacing your personal property. Most coverages have deductibles too. It is the amount you have to pay before you can start enjoying your benefits.
When choosing an insurance provider, compare the deductibles and coverage limits of different providers. A comparison site may help you make the right decision. The team from MyChoice.ca advises that you choose one that isn’t owned by an insurer because independent insurance providers are more reliable.
Reasons to getting Home Insurance
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It May be Required
There are instances when home insurance is a requirement. If, for example, you are getting a mortgage, your lender may demand that you have insurance. You may be unable to fund or refinance your mortgage without proof of home insurance. Lenders want assurance that their investment is protected.
Mortgage companies may also require that you get flood insurance and other insurance types. The requirements vary depending on where you live. According to the Consumer Financial Protection Bureau, a lender may buy insurance on your behalf and charge you for it. However, the coverage they get for you may be more expensive than you would prefer. Its coverage may be limited.
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Hazard Coverage
Home insurance protects you from common hazards like hail, lightning, fires, and hurricanes. It covers the structures of your home and may help you pay for the costs of reconstruction or repair. It may also cover the cost of damage to detached buildings like barns and garages.
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Protecting More Than the Home
Contrary to its name, home insurance will protect more than just the physical structures of your house. It covers your personal belongings, guests in case they are injured within your property, and structures in your property. A standard policy offers the following coverage:
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Dwelling Coverage
If your house, decks, garages, and other structures in your property are damaged, your home insurance policy will pay for the cost of repairing them. The appropriate dwelling coverage for your needs is calculated based on the square footage that your house covers. Consider the cost of rebuilding your house rather than its market value.
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Personal Liability Coverage
Personal liability coverage protects you and members of your household if you are legally responsible for the damage of someone else’s property or their injury. It may cover legal fees and the costs of repair.
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Personal Property Coverage
Personal property coverage will help you cover the cost of replacing or repairing your property if it is damaged or stolen by covered risks. It may cover your electronics, furniture, and clothing. Your property is covered even when it isn’t in your house.
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Additional Living Expenses Coverage
If your home has been rendered inhabitable by covered risks like fires or vandalism, your home insurance policy may help you cover the associated costs of living. It may cover hotel bills and other temporary living expenses.
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Guest Medical Protection
If a guest is injured within your property, your policy may cover the cost of their medical bills.
What Is Not Covered
Even though home insurance offers broad coverage, it doesn’t cover everything. For example, it doesn’t cover normal wear and tear or intentional damage to your home. Policies exclude damage due to:
- Power failure
- Nuclear hazards
- Floods including damage from sewer backup and drains
- Mold, vermin, fungus, and bird infestation
- Landslides and earthquakes
- Acts of war or government action
If you need coverage against these risks, you may need to get separate coverage. Let your insurance provider know about your needs, and they may suggest the most relevant coverage.
In conclusion, getting home insurance won’t protect your home from damage but it will give you financial safety in case the unexpected happens. If you need help buying a policy, consider getting the help of an insurance agent.
