home insurance 101

home insurance 101

Homeowners insurance covers you for potential loss resulting from risks such as burglary or theft, severe storms, fire and also your personal liability. The specific risks you may face as a home owner could include floods and earthquakes, which you must cover with separate policies, as these disasters are not included in a standard home insurance policy. Homeowners coverage is not required by law. However, if you borrow money to buy a home, your lender will likely require you to buy a homeowners insurance policy in order for you to qualify for a home loan.

Getting the right homeowners insurance coverage for your home and belongings depends on many things, from crime rates, tornado risk and wildfire hazards in your area to the specific personal property coverage and deductibles that make the most sense for your household. At a minimum, your lender will want your policy to cover or exceed the amount you owe on the loan. Most home owners, however, want enough coverage to repair or replace the home.

When you buy home insurance, you are protecting your financial future. While you may be able to buy online homeowners insurance, our experience has taught us that taking the time to talk to a knowledgable, full-service independent agent is a crucial step in making sure you find exactly the right policy for your individual needs. That’s where we come in. At Covenant we work hard to take the guess work out of the process, giving you in-depth explanations of each aspect of your policy and taking the time to answer your specific questions along the way so you are sure you have the exact coverage you need.

Here are a few key strategies to make sure you have adequate coverage for your home and personal belongings:

  • Get “replacement cost” home insurance to cover what it would cost to replace your home and personal property, instead of “actual cash value” coverage, which will only cover the current depreciated value.
  • Be sure to read over the policy’s exclusions carefully and ask your agent if any of these items are a risk, and if you can purchase additional insurance to cover them.
  • Talk with your full-service independent agent about how much personal property coverage you will need or if the limit is set by the policy you are purchasing.
  • Add coverage for specific items of value, such as jewelry, art and collectibles, through “endorsements” or “riders” on the policy.

The liability section of homeowners insurance is often one of the most overlooked and misunderstood. Your home liability coverage protects you in the event that someone is injured on your premises or you are responsible for damage to someone else’s property. You homeowners insurance can even protect you against injury you cause to another person off-premises under certain circumstances. Note that liability insurance will not cover acts of violence or intentional damage.

Your liability insurance would also typically provide coverage if:

  • Your child throws a baseball through the neighbor’s window.
  • Your dog bites a visitor to your home.
  • A visitor is injured on your backyard swing set or trampoline, or by falling on your icy sidewalk.
  • A dinner guest gets food poisoning and is hospitalized.
  • If someone files a liability claim against you, your insurance can pay for property repairs, medical or funeral costs or even a lawsuit if the injured party chooses to launch a legal process.

When evaluating the amount of liability coverage that makes the most sense for you, be sure to fully discuss your limits and deductibles with your agent. Take time to understand your risks, and determine whether you will be well covered in various circumstances. In the event of a disaster, the costs of recovering can devastate household finances. Quality home insurance can make a difficult situation bearable and help you get your life back on track. It is also a good idea to talk with Covenant about increasing your liability insurance with an umbrella liability policy, which will provide additional liability coverage up to $1 million or more.

Now that you know the basics of homeowners insurance, you can see why it is so important to work with a full-service, independent insurance agent like Covenant who can guide you through the process and answer all your questions. Because we work for our clients and not an insurance company, we can compare policies and options from multiple insurance companies and provide all of the information you need to make an informed decision. Get a a Quote now to see the Covenant difference for yourself.

 

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Information about Home Insurance provided by Trusted Choice

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