May 16th, 2014
There are many exciting advantages to being a homeowner, including the freedom to do what you like with your property and fulfilling the American dream. However, many are unaware of how their homeowners insurance uses their personal information to come up with coverage options. Furthermore, some might not know what their coverage actually means versus what they need.
How insurance is personal
When you sign up for an insurance policy, your provider will need to know many personal things about you, including your credit score, what you own, the value of your home and what type of home you own. Homeowners insurance will cover the cost of replacing your personal belongings or rebuilding your property in the event of a fire, damage from foul weather or theft, but your provider will first need an estimate value on these items.
While many homeowners are preoccupied with the new responsibilities of ownership, the importance of a personal insurance policy means that more time should be spent picking out the right coverage. In general, you will need coverage for the following:
Enough is enough … or is it?
With your homeowners insurance, you need to ensure that you get a policy with enough coverage. Some policies may insure you for the cost of your belongings, or their actual value, rather than the cost of replacing them. This means that if you were to lose your home or your valuables, you might not get enough from your provider to pay for construction costs or new items. You should check that your coverage does not have limits if you are insured for the actual value of your belongings, as some providers may cap their limits at 100 percent or 150 percent of the item.
When determining your coverage limits, you can estimate the value of your belongings. However, using an appraiser may help you come up with a more accurate estimate. The same is true for determining the cost of rebuilding, and it may be helpful to consult with a real estate professional or home builder to appraise this expense.