Everyone needs homeowners insurance coverage – that’s a fact. But before you get it, here are the 5 things you should know:
The difference between replacement cost and actual cash value.
When you take out homeowners insurance, you have the choice to choose between insuring your home and items for actual cash value or replacement cost. Replacement cost is the amount of money that it would be to replace your home building materials and personal effects without any type of depreciation. Actual cash value is the amount you would receive to repair your home or personal property damage after depreciation. You’ll pay a much higher premium for replacement cost than actual cash value, so choose your options wisely.
The deductible/coverage relationship.
You should understand that the better your coverage is, the less you will pay out of pocket in the case of an emergency. Also understand that the lower your deductible is, the more you’ll have to pay out of pocket in the case of an emergency. Sometimes, your lender will decide your minimum amount of coverage and may require you to purchase an amount that will cover the mortgage.
You can shop around and ask for discounts.
Even though your mortgage lender will definitely recommend a specific type of homeowners insurance with a specific company, you don’t have to buy insurance from them. You are allowed to shop around for your own homeowners insurance provider. A good way to do this is to call a few providers and ask for a quote to see how much of a premium you would be paying for a year’s worth of insurance. Make sure to ask the company what discounts are offered and see which ones you qualify for – some companies will give you a discount if you have an alarm system or deadbolts, for example. If you went to college, make sure to double check with your alumni network to see if you receive any discounts from your particular school. You could also try getting quotes through Insurancequotes, Inc.
Review the fine print and review once a year.
Before you sign any papers, know that you’re signing a binding legal contract with your rights and responsibilities stated. You need to review all the terms and know what you’re agreeing to just in case of an emergency. Keep your policy accessible so that you can refer to it quickly if needed. Also, it’s important to review your insurance policy once a year so you can see if any of your needs have changed.
You need homeowners insurance.
All in all, the most important takeaway is that you need homeowners insurance. Even if you think your living situation is perfectly safe, you just never know when you’ll need emergency coverage. More importantly, you need liability for accidents that hurt other people on your property. You can never go wrong with being too protected when your home and safety is concerned. Its also a good idea to get insurance for other assets of yours that are just as important as your home, like you vehicles. Money Expert are a great insurance company for vehicles like vans, no matter your situation they are able to offer you a cover to suit your needs.
