Your home is one of your most prized possessions one that you have worked hard to obtain and one that you work hard to maintain. No matter how careful you are an accident can destroy your home leaving you with nothing unless you have homeowner insurance. Taking out a home insurance policy is one of the safeguards you can put in place to protect your family and your finances.
In a homeowner insurance policy, there are named perils for which the insurance company will pay for repairs or pay to have your home rebuilt if it is completely destroyed. The usual perils are fire, theft, vandalism, lightning, wind, ice and hail. Damage due to flooding from an outside source is not covered under a standard home insurance policy, but you can pay extra to have such a rider added to your insurance. Earthquakes are not covered under any home insurance policy.
When you take out a homeowner insurance policy, you have to make sure you have enough coverage in the policy. The amount of money should be equal to or more than the amount of money you would need to replace the home and its furnishings. For a newly purchased home, the amount of coverage should be the purchase price or the amount of money that you owe on your mortgage. If you purchased your home some time ago, you should realize that house prices have increased dramatically over the years. Ask a builder in your area to give you an estimate of what it would cost to rebuild or check to see what homes are selling for in your area to give you an idea of the amount of coverage you need.
The coverage you have on your furniture and personal possessions is generally equal to half that of the overall coverage on the home. Take an inventory of your possessions and add up the total cost of replacing them. If this amounts to more than half the coverage, then you need to up the coverage so that you will have enough money if you have to make a claim. Art, jewellery, furs and expensive electronics can eat into this amount of money, which means you can have them insured on their own, separately from the home insurance.
Make sure that if you are forced to leave you home because of extensive damages or a complete loss that the insurance policy has provisions for accommodations for you. Without this clause in your policy, you will not only be left homeless, but you will also have to pay for an apartment or a hotel for a certain length of time.
If a guest happens to incur an injury while on your property, such as in a slip or fall or from a dog bite, you could be sued for damages. This is true even if the person does not have your permission to be on the property at the time. You are responsible for paying the medical expenses and any other costs associated with the injury. Recent court cases have resulted in judgements against homeowners in excess of $1 million. Such liability insurance is a standard feature in homeowner insurance. What would happen to you if this was the case and you didn’t have any home insurance to fall back on?
Homeowner insurance is something that you never hope to use but is good to have if you ever need it. When you have a policy in place, you have peace of mind in knowing that if an accident happens you are protected.