There are three types of home insurance policies that homeowners can purchase to provide financial protection in the event of a covered loss. Building insurance covers the physical structure of your home, and contents coverage protects your personal belongings. A combined policy of building and contents coverage is a good idea for those who own their homes. Renters insurance is necessary for renters.
Below is a rundown of homeowners insurance and why you should compare quotes before buying.
What Homeowners Insurance Does and Doesn’t Cover
Buildings coverage protects the physical structure of your home and the permanent fixtures and fittings. Each homeowner’s insurance policy is different, but they typically provide coverage for weather damage when disaster strikes, including water damage, flood damage, fire damage, natural disasters such as earthquakes and hurricanes, explosions, theft and vandalism, and property damage from falling trees, motor vehicles, and escaping water.
Contents coverage protects your personal belongings in the event of damage or theft. Most homeowners insurance policies cover the cost of a hotel in the event a covered loss prevents you from staying in your home. There are limitations when making an insurance claim, which is why it’s important to read the fine print before choosing a homeowners policy. Both building and contents coverage provides legal liability protection in the event you incur legal costs because a guest is injured while in your home. This is also the case if your home causes property damage or physical harm to neighbors or passersby.
Home insurance won’t provide financial protection for acts of terrorism, damage from wear and tear, accidental damage, high-value belongings, and business-related accidents or damage if you use your home for business activities. It’s important to understand that many home insurers don’t consider coverage valid if your home is unoccupied for more than 30 consecutive days annually.
Where To Buy Homeowners Insurance
It’s important to shop around for homeowners insurance, as not all insurance companies offer the same types of coverage and insurance rates. Understanding how much coverage you need and finding the right type of coverage can be tricky. Working with a licensed insurance agent is a smart way to tailor a homeowner’s policy that fits your exact coverage needs. The best way to find the best price on insurance coverage is to compare home insurance policies from a range of insurance providers.
Comparison sites make it easy to compare home insurance quotes so you can find the right amount of coverage for the best rate. You can take advantage of a home insurance calculator to determine how much financial protection you need in the event disaster strikes. Never purchase an insurance policy without reading all of the fine print to ensure you are clear about inclusions and exclusions, how to make insurance claims, coverage limits, and any other details that could affect your policy.
The Cost of Homeowners Insurance
The average cost of homeowners insurance depends on a variety of factors such as the age, size, and ZIP code of your home, as well as the likelihood of natural disasters in your area. Living in an area prone to natural disasters and flood damage will result in a more expensive insurance policy. Home insurance premiums are also typically higher if you live in a ZIP code with higher crime rates, higher rebuilding costs, or strict building codes. The age and condition of the physical structure of your home and major home components and adding additional coverage options to your policy will also affect your insurance rate. Your monthly premium is further affected by the size of your deductible, as the higher your deductible, the lower your monthly premium will be.
It’s always a good idea to review your current coverage type and costs to ensure you have the best homeowners insurance policy. Your coverage needs will change over time depending on the real estate market, the number of valuable items you have, and any updates or renovations you make.
