Home Insurance – Whether you are buying a home, a new house, a condo, a townhome or simply purchasing insurance, Home Insurance is a must, every property should be insured. If there is a mortgage, the lender will require coverage.
There are different types of insurance policies; i.e. Homeowners Insurance, Landlords Insurance, Condo/Townhome Insurance, Commercial Insurance etc… The protection and covered perils differ on different forms of insurance. While shopping for insurance, it is a common mistake to compare only the premium and not the coverage sought!
Homeowners Insurance usually comes in a package; i.e. HO-3 Special Form or HO-5 Comprehensive Form. These forms include just about every peril but excludes only earth movement, floods, nuclear accidents, and war.
Insurance companies will calculate the approximate replacement cost of construction on a dwelling based on the year built, square footage, style of home and geographic location; in addition to the reconstruction value, a policy will declare an Extended Replacement Percentage over and above the dwelling coverage as a safety buffer for both the insured and the carrier.
It is important for you to make sure that the policy will provide enough coverage for your Personal Property & Personal Liability needs. It is also important to declare any valued possessions as policies have a strict limitation regarding Jewelry, Silverware, Furs and certain other high valued possessions. Premium will be charged based on the declared risk to the insurance company.
Here are a few questions to help get you started:
• What type of policy will cover your specific situation?
• What options are available for the policy form?
• Do you wish to cover Jewelry, Furs or Artwork? Do you have current appraisals of items you wish to declare?
• How much Personal or Family Liability coverage do you need? Is an Umbrella policy available if you need more than the maximum available?
• Is the policy a Replacement Cost policy?
• Higher policy deductibles generate a lower premium; obtain the options and assess the level of risk you’d like to take. Also, most policies don’t have an applicable deductible for Liability claims.
• Who will pay the premium? If you have a mortgage and maintain an impound account, the insurance company will bill the lender.
• What home insurance discounts are available; i.e. Monitored Alarm System etc…
• How can you safeguard photos and receipts which will be helpful in the event of a loss?