There is nothing more exciting than purchasing a new home. It is one of the most stressful and rewarding experiences, but in the end it is worth it. It is after all the American Dream!
But, with home ownership comes a lot of responsibility and even more decisions. One of the more important decisions you’ll need to make is how to find the right and best homeowners insurance for your home. After all, you want to protect your biggest investment.
How much coverage should you get? What do you really need so that you will be covered no matter what happens to your home?
There are many things to consider when purchasing home insurance and we’ll try to help give you some clarity on what is necessary.
There are many different home insurance policies offered, from a basic policy, to other policies that include a wider range of coverage options.
A standard policy will usually include liability coverage for the main structure of your home, the personal items that are in your home, as well as structures that aren’t attached, such as your garage and/or a garden shed.
Most basic policies will also offer personal liability coverage that would cover you if anything were to happen to a visitor on your property. If your neighbor is visiting and slips and falls, you would be covered for that (of course we never want that to happen)!
Natural Disaster Coverage
Every policy has different types of natural peril coverage which is specifically listed in each different company’s coverage section. The list of random perils that are included in each policy depend on the company and policy you choose. The more typical perils or hazards that are usually included in most policies are: lightening, fire, wind or hail, vandalism, falling objects, damage to your home by a car or even airplane.
Earthquake or Flood Coverage
We all hope that the big earthquake that is supposed to hit California never occurs, but it could happen. Earthquake coverage is a really good idea for any area that is prone to earthquakes. The same with floods. If you live in a state that has seriously heavy rains, then flood insurance is certainly worth considering.
With most insurance policies, earthquake and flood coverage is an add-on coverage option to your basic policy and not considered a peril but an additional rider.
The amount of home insurance necessary
The best way to figure out the home insurance that you need is to come up with the full replacement cost of your home. For instance, what is the total cost that you would need to rebuild your house just as it is today including the personal items inside your home? Most companies recommend that you estimate the personal property replacement anywhere from 50% to 60% of the value of the property.
Cost of Homeowners Insurance
The cost of homeowners insurance can vary widely depending on where you live, the type of home you purchase, and the coverage you choose. If you have a pool, your insurance will be higher.
California, surprisingly, does not have the highest home insurance costs so you should be able to get a good premium rate for your home. Insurance is a very competitive field, so every company will want to give you their best rate possible.
Your price will also be determined by the type of materials you used to build your home, your credit scores, as well as any other additions to your home such a security system or anything that might be of value.
Now that you understand the fundamentals of a policy, the best thing you can do is to consider what you want and need to be able to protect your home properly.
Once you have determined exactly what you need, make sure to get a few quotes from reputable companies and determine which feels like the best fit for you and your property. Look for a company, that not only has great coverage, but is known to pay back in a timely manner and honors the majority of their claims.
If you do your homework and know what you want out of a homeowners insurance policy, then you will be better prepared to get the best policy for your particular home.