3 Tips Before You Buy Home Owner Insurance

Home owner insurance is an insurance designed to cover expenses related to the repair of homes and anything that is within it. The home insurance market has a wide variety of options, each with it’s own combination of rates and benefits. Navigating them all can be overwhelming, but with you should be able to find a policy that fits your needs without overstraining your budget if you follow the tips listed below.

What Home Insurance Covers

Before you begin, you need to understand what the home owners insurance will cover. Some insurance companies will only general coverage, while others will include the more specified coverage, such as flood insurance and tornado insurance, into their policies.  any insurance policy worth it’s salt should offer the following types of coverage.

  • Dwelling Coverage – Covers the house itself and the attached structures, as well as built-in appliances, plumbing, heating, built-in air conditioning systems and electrical wiring.
  • Other Structures Coverage – Covers detached structures such as garages and storage sheds, as well as fences, driveways and sidewalks. It should be noted that unattached structures that are used for business purposes are not covered by home insurance.
  • Personal Property Coverage – Covers personal belongings of anyone who resides in an insured home (guests don’t count). Most home insurance providers will not cover motorized vehicles. The providers may also limit coverage of firearms, artwork, business property, electronic data, jewelry and money that is physically stored inside the house. A good policy would cover damage caused by household pets.
  • Loss of Use Coverage – Covers living expenses for policyholders who can’t live in their homes while they are being repaired. This only applies if their living expenses exceed what they would normally spend at their homes.
Tip #1 - Figure Out Your Needs

When you are buying insurance, you should not be too stringy. If you live in a flood-prone area, you should get a policy that covers floods. If you live on a fault line, get a policy that covers earthquakes. As the aftermath of Hurricane Katrina demonstrated, it never hurts to prepare for the worst. At the same time, you should not have to pay for the benefits you clearly won't need. For example, if you live in a rowhouse with an empty yard, you don't need the "other structures" coverage.

You should also make sure that the insurance coverage will be enough to repair the damage. Many insurance companies will not give you a blank check as far as repairs go. Each type of coverage may come with caps, and anything that goes above it will be your responsibility. That is why it's important to figure out how much it would cost to completely rebuilt the home and replace all the possessions. You probably wouldn't need all that money, but it's important to be prepared for the worst.

Tip #2 - Look for Discounts

Most insurance companies offer a variety of discounts for home owners insurance. The insurance companies prefer to offer policies to people who won't use them often, if at all, so they are always on the lookout for policy holders that won't take many risks. The less risk you pose, the more inclined they will be to give you discounts. You can get discounts for taking steps to protect your home. If, for example, you install a security system or get a good lock, you may be eligible for discounts. You can also get discounts just for staying healthy and leading a safe lifestyle. You can also get discounts if you don't smoke, or if you have a clean driving record. Different companies offer different discounts, so you should check them carefully to find as many applicable discounts as they can.

Tip #3 - Check for Fraud

If something looks too good to be true, it probably is. If you have any reason to be suspicious, look it up with Better Business Bureau and your state government's Attorney General's office. You should also check customer advocacy websites.

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