Disasters are inevitable. No matter where you live, you will never be able to escape the threat of a disaster. The best thing you can do to prepare for them is to purchase
homeowner’s insurance. This insurance will protect you and your property against the threat of disasters.
Homeowner’s Insurance Basics
Homeowner’s insurance provides financial protection against disasters occurring on your property. In addition to insuring your home and personal belongings, home insurance also provides coverage for liability. Your legal responsibility for injuries or property damage you or your family members cause to others will be protected.
Although the majority of natural disasters are covered, you need to buy additional insurance for the specific disasters not covered:
floods, earthquakes, and poor maintenance. You also need to update your policy annually to make sure that you are keeping up-to-date with current building costs, any remodeling you have done, and personal belongings inventories.
Home insurance quotes may be determined by a number of factors, including the home’s value, the home’s age and location, fire protection, and security systems. Other factors that influence your homeowner’s insurance quote include the material used in the construction based on your location, proximity to a fire station, and the crime in your neighborhood. By researching with insurance companies, you may find that adjusting these factors—such as adding smoke detectors or a security system—may help lower your quote.
Four Essential Types of Home Insurance Coverage
Home insurance covers four essential categories: additional living expenses in case of a disaster, coverage for the structure, coverage for your personal belongings, and liability protection. Your home insurance will cover additional living expenses if you are temporarily unable to reside in your home due to an insured disaster. Expenses covered while your home is being rebuilt include hotel bills, restaurant meals, and any other living expenses.
Your home insurance will also cover the structure of your home if it is damaged or destroyed by an insured disaster. Make sure that you are buying enough coverage to rebuild your home. Your insurance should be for the total amount it would cost to rebuild the house if it was destroyed. Although not all insurance policies are the same, home insurance policies typically include coverage for attached garages or detached structures such as a shed or pool.
Factors going into the total amount include the local construction costs, square footage of your home, the type of exterior wall construction, number of rooms, and any special features your house has. To get a quick estimate of the amount, multiply the local building costs per square foot by your home’s total square footage.
Coverage for your personal belongings is also insured by your homeowners insurance in the event they are stolen or destroyed by an insured disaster. Outdoor landscape, such as trees, plants, and shrubs, are covered under the standard homeowners insurance against insured disasters and theft, but are not covered for wind damage or disease.
To ensure you get proper coverage of your personal belongings, make an inventory of everything you own. Write down the serial numbers, model numbers, purchase price, present value, and date of purchase. If possible, attach receipts and pictures of your belongings to this record. You will want to store your inventory in a safe location, such as a safety deposit box in a bank, in the event your home is destroyed and you need the records. Be sure to update the inventory annually and when you make any major purchases.
The fourth essential coverage offered by home insurance is liability protection. This will protect you against lawsuits for injury or property damage caused to others by you or your family. It will pay for the cost of defending you in court and court rewards up to your policy’s limit. The liability protection also provides no-fault medical coverage if a neighbor gets injured in your home. These expenses are paid without liability claims being filed against you.
When purchasing your home insurance policy, remember to purchase additional insurance for floods or earthquakes if you live in at-risk areas. Keep records of your personal belongings, house renovations, and home price up-to-date annually to ensure you receive the most current coverage available.