Homeowners Insurance 101

If you search for “home insurance guide” on Google, you will see that there are many insurance companies out there that are offering home insurance. But if you are like most people, you’re probably overwhelmed and wondering how you should choose a policy. After all, your home is your most prized property.

The first step in the right direction is to understand how insurance works. You are basically paying for a company in advance to cover and pay for any damage that may happen in the future. The amount you pay in premiums depends on the risk assessment – the higher the possibility of damage to your home (for example if you live in a flood-prone area like FL), the more you will pay. A lot also depends on the appraised value of your home.

Once you understand this, you can be prepared for how much you would have to pay.

When choosing an insurance company, it is always a good idea to check a comprehensive home insurance guide and determine what you should be getting. Based on our research, you should be getting the following.

Extended replacement cost – This simply refers to your house being rebuilt to its original condition, even if it means the total cost exceeds the policy amount.

Risk consulting – An insurance company must have highly-trained risk consultants who will visit your home and make recommendations.

Temporary living arrangements – If you are unable to live in your home or if your house is being rebuilt, your insurance policy should pay for rent in an apartment or a a stay at the hotel.

Cash settlement – If you prefer not to build your home, the insurance company must have a guarantee that you will be paid the amount stated in your policy.

Contents insurance – The house itself shouldn’t be the only thing insured. The furniture and the other things that make your house a home should be protected too.

As you can see from above, getting a home insurance policy isn’t as easy as it sounds. You have to make sure you have adequate protection for repairs, rebuilding, contents replacement, and temporary living arrangement.

No matter what you do, do NOT buy an insurance policy from the first company you see on Google. Instead, get a quote and detailed information from at least three insurers. In this way you will know which home insurance policy is best for your needs. If you need help, you can search for an insurance broker.