Guide to Choosing the Best Homeowner’s Insurance - Part 3

Cosecha Insurance

As a homeowner, you want affordable homeowner’s coverage. But you also want the best coverage. It’s important to know and understand everything homeowner’s insurance can, and should, cover.

Eight Tips for Evaluating Your Policy

You already know you need to dig up and dust off that homeowner’s policy. And if you’re buying homeowner’s insurance for the first time, you know more about what to expect in your coverage. But how can you evaluate your policy and make sure you have the coverage you need? Here are a few tips for evaluating your policy:

1. Check that you have enough coverage for your home.

Don’t make the costly mistake of assuming your coverage will rise and fall with your home’s market price. The replacement value of your home needs to take into consideration the cost of labor and materials required to rebuild it. That amount of coverage may be significantly higher than your home’s market price.

2. Conduct an annual policy review.

Do not let one year go by without reviewing your homeowner’s policy. It may be a tedious task, but it’s worth it.

3. Know exactly what your policy covers.

Reviewing your policy and understanding every element of it are two different things. While reviewing your policy each year, you may find a section you don’t understand. When you get to that point, call your insurance agent and ask questions.

4. Insure your home improvements.

When you make improvements to your home, there are a couple of things to consider. These improvements may qualify you for a discount on your premium, but also consider how those improvements will affect the value of your home. Make sure you have enough coverage for your home during and after home renovations and/or improvements.

5. Be prepared for the extra cost of rebuilding your home.

If you have a serious disaster and need to rebuild your home, you may not have coverage with a large enough payout to rebuild your home or replace all of your personal items. There are three options for the amount of homeowner’s insurance you can have and not all of them will leave you with the lump sum of money it would take to rebuild your home. The policies that do have a more expensive premium.

6. Do a home inventory.

It’s possible that you can have a home insurance claim denied because you don’t have good records of your personal belongings and their appraised value (or purchase price). Document what you have and take photos and videos of every room, closet and cabinet space. Then, if your home is destroyed, you have an accurate inventory of everything.

7. Try not to file minor claims.

Making just one insurance claim can cause your annual premium to increase up to nine percent. In many cases, making a claim is necessary. However, there are times when you could cover the cost without making a claim. Weigh your options carefully and know that if and when you make a claim, you’re likely to see an increase in your premium.

8. Insure personal property for the replacement value, not actual cash value.

Cash value sounds appealing, but it only pays for replacement up to the policy limits minus a deduction for depreciation. If you want to make sure your personal property is covered, know your policy limits and opt for replacement value. Then, you’ll be able to fully replace what you lost without having to worry about a deduction for depreciation.

Source: gunnmowery

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