Buying a home is probably one of the most important and largest purchases a person will make. This home is often an investment in their financial security, as well as their family. As valuable as a home is, it is important to protect that property from the various threats and risks the world may throw at it.
Proper maintenance and security measures can go a long way in protecting a home. However, the best protection a homeowner can have is the right homeowner’s insurance policy. This coverage offers financial protection for many of the threats and risks a homeowner may face.
What is Homeowner’s Insurance?
Homeowner’s insurance offers financial protection for homeowners in the event of an unexpected event that causes damage to the home. It can even offer liability protection for the homeowner. Companies, such as T. S. Peck, offer a variety of insurance options to help homeowners protect their investment.
A home is a major investment. Situations, such as a fire or storm, can cause severe damage to that home. The cost of repairs can sometimes be quite expensive. Most homeowners do not have the cash on hand to cover such a loss. Homeowner’s insurance provides the financial assistance needed to make repairs to restore the home.
What Does a Typical Policy Cover?
A typical homeowner’s insurance policy covers the destruction and damage to the interior and exterior of a home. It also provides coverage for losses and damages due to theft and vandalism. It even provides personal liability protection for the homeowner.
The policy will provide protection for the structure of the home in the event of a fire or other covered disaster. However, when the home is a complete loss, the amount provided by the insurance company can vary depending on the type of insurance.
It is important for homeowners to understand the type of coverage they have for their home. Some companies offer the actual cash value of the home when there is a total loss. Some offer the cost to replace or completely rebuild the home. Others utilize a combination of these methods to determine payout amounts.
In addition to this basic coverage, homeowners can add protection to cover other structures on their property, such as garages or sheds. They can also increase coverage amounts or lower deductibles. These additional options, however, can increase the cost of the policy.
What is Liability Protection?
Liability protection is usually a standard part of a homeowner’s insurance policy. This helps to protect the homeowner from financial liability in a variety of situations that may take place on or even off the covered property.
One way liability coverage protects homeowners is if a guest injures themselves while at the home. The homeowner may be responsible for any costs of that injury. The liability insurance can cover those costs and prevent the financial burden for the homeowner.
Liability can even help cover damages done to another person’s property by the homeowner or one of the family members. For example, the homeowner’s children playing in the backyard, throw a baseball through the neighbor’s window. Homeowner’s insurance can cover that incident.
Are the Contents of the Home Covered?
In most cases, there are additional coverages in a homeowner’s insurance policy that covers the personal property of the homeowner. This means if a home burns down or if the home is broken into and the personal property is damaged or stolen, it can be covered by the homeowner’s insurance policy.
There are some caveats to this coverage, however. First, there is often a set limit to how much coverage a homeowner may have for their personal property. If the losses total more than that amount, some items may not be covered.
For high valued items in the home, such as jewelry or artwork, it may be a good idea to have extra insurance coverage specifically for these items. This will ensure they are covered if an incident occurs that causes damage or loss to these items.
Another problem that may be faced with the personal property coverage is how much is actually covered. For example, the homeowner may have had a television damaged that was two years old. Some policies may only offer the depreciated value for the television, some may offer the price of a replacement television.
These various caveats are things any homeowner should review before choosing their policy. This ensures they get exactly what they want and eliminates surprises in the event of such a disaster.
What is Flood Insurance?
The typical homeowner’s insurance policy does not cover damages due to flooding. This can be very troublesome for those who live in an area prone to flooding. Fortunately, there are additional insurance coverages homeowners can purchase to help protect the home in case of a flooding event.
For those purchasing a home in an area prone to flooding, it may be a good idea or even be required in some cases, to get flood insurance to protect the home. This is also the case for various other areas prone to other types of natural disasters, such as hurricanes, earthquakes, or volcanic activity.
It is important for those planning to purchase a home to determine if they are in any area that is prone to specific natural disasters. This can allow them the time they need to purchase the insurance coverage for that specific disaster.
What is a Deductible?
A deductible is the set amount in an insurance policy that the policyholder is expected to pay before any claim is made on the policy. This means that every time there is an incident in the home that a claim must be made to the insurance company, the homeowner will be required to cover that deductible first.
Deductibles vary by policy. In some cases, homeowners may be able to get lower deductibles by paying a higher monthly premium on their policy. Conversely, homeowners may be able to reduce their monthly payments by getting a higher deductible.
Having a higher deductible, however, may prevent many claims from being paid by the homeowner’s insurance company. In cases where the cost of damage is less than the deductible, it may be a better idea to just pay the cost of repairs without creating a claim. This can help minimize the risk of rate increases for the policy.
Is Homeowner’s Insurance Necessary?
There is currently no law that requires a homeowner to maintain an insurance policy. However, if the home is being purchased with a mortgage, the lending company will often require the homeowner to maintain an insurance policy to protect their investment.
Even though a homeowner’s insurance policy is not required by law, it is really a good idea to have it anyway. Homes are expensive. When a disaster occurs, it can be impossible for some people to make the necessary repairs out of pocket.
Homeowner’s insurance provides the protection needed to keep a home safe and secure from the unexpected events that may occur. It is impossible to prevent all these possible issues. However, maintaining protection in case of such an event is the next best thing.
