How does homeowners insurance work? There are several factors that individual homemakers should consider when deciding what type of basic homeowners insurance they need and how much to buy.
Damage to your home
Be sure to check your policy and make sure it is covered adequately. You may need to purchase separate insurance for fire, flood, or other natural disasters. How does homeowners insurance work? Many policies do not automatically cover some disasters in an effort to keep basic homeowners insurance costs low.
You can keep costs low by evaluating the probability of each event and adjusting your deductible to reflect the risk. You can often get a discount for having storm shutters or smoke detectors.
The damage to your home could be minor enough to warrant a do-it-yourself solution instead of filing a claim and seeing your rates skyrocket. Small roof damage without leaks or structural damage is often no reason for a brand new roof. You may be better served by climbing and shingling the affected area again.
In the case of major damage or total loss to the home, make sure your policy covers the emergency home. A hotel is preferable to a shelter, especially if you have children.
Robbery and theft
How does homeowners insurance work? If someone breaks in and steals all of your electronic devices, your jewelry, and your prized purebred cockatoo, you may never regain the feeling of your lost property, but it should be able to replace its monetary value.
The number one way to ensure that you are properly rewarded is to save receipts for anything valuable you buy, take a photo too, and keep both with a copy of your policy in a safe and secure place.
For some items, the insurance will only pay the actual cash value, so consider getting replacement value insurance for items like expensive televisions or computers. Very high dollar items, such as a diamond ring, may be subject to limitations unless you get a rider in your policy that covers that specific item. The insurance company will want an appraisal for the passengers.
You can usually get a discount on the personal property portion of your policy if you have a security system.
Liability coverage for accidents
If a guest in your home is injured, the injured party can file a claim on their basic homeowners insurance policy. It is very, very important to have adequate liability insurance if you have children and your friends come to play regularly.
A general policy will cover claims up to a million dollars, but be careful when advertising the fact that you have high coverage; Some people are unscrupulous enough to fake a fall if they think it’s worth suing you!
Umbrella policies are an especially important option if you have a dog, pool, or trampoline in your yard that could pose a hazard to visitors.
Many Americans don’t even know what they are covered for or how homeowners insurance works, and misconceptions abound. Making sure you have enough coverage is only responsible!
Make sure you know what you’re covered for and where you’re vulnerable, and consider what homeowners insurance you should have to cover each eventuality.
