 |
- What it covers: An average policy will pay for damage to your property and possessions due to certain storms, fire, theft, or vandalism. Similar to renter’s insurance, it can also provide liability coverage if someone gets injured on your property and decides to sue. Your policy also covers shelter costs in the event that you are temporarily displaced from your home. Homeowner’s insurance can also protect items outside of the home, such as items stolen from your car; auto insurance won’t cover it but your homeowner’s policy probably will.
- What it doesn’t cover: A standard policy does have some exclusions; earth movements such as landslides, earthquakes, and sinkholes, power failure, war, nuclear hazard, government action, faulty zoning, bad repair or workmanship, defective maintenance and flooding. Wind storms are usually covered, including tornadoes, however some companies don’t include tornadoes and hurricanes in high risk areas. Water damage can be hard; normally water from above (rainwater or a burst pipe) is covered but water from below (such as backed up sewers) usually isn’t covered.
- Shop around: Don’t just shop for a great policy; make sure you find an agent that you trust.
- Actions to reduce premiums: Having a working smoke detector may help lower premiums as will simply having a deadbolt on your door or having a burglar alarm system. A deadbolt can reduce a premium by about 5% and an alarm system can create a 15%-20% premium reduction.
- Replacement coverage vs. market value: Replacement cost covers repairing or replacing your entire home; market value is how much someone would pay for your home and the accompanying land in it’s current (damaged) condition.
- Don’t wait to file a claim: When looking into policies, be sure to ask about time limits for reporting claims and then stick to them!
- Write everything down: To avoid any issues, be sure to write everything down about a loss-document it as best as you can. Keep all receipts, contracts, appraisals, and also document phone calls by writing down who you spoke to and when.