Home Insurance: What You Need to Know

On December 24, 2012

home-insurance1Home insurance is usually applied for in order to remain covered even if a disaster strikes one’s home. It is recommended that customers insure their homes as soon as they become home owners but there are several factors they must be aware of before applying. .

Being aware of the possessions in a home is important; a homeowner must know what he or she has and what they might lose in case of a disaster. The structure of the house, important valuables and belongings, living expenses in case of having to live elsewhere and liability to others are the four other key elements people need to be aware of. Liability coverage is also vital in case there is a need to protect oneself if one gets sued. The right insurance will cover all these aspects.

Furthermore, replacement value insurance must be bought for possessions that might be very valuable or expensive. If the cash value of products can be vouched for, the policy can cover the contents of a home through replacement value insurance. Customers are encouraged to look for guaranteed replacement coverage, with a good percentage. Some companies may offer a certain percentage of guaranteed replacements, but there are several that give customers the option to replace 100 percent of their valuables.

Customers must also be vastly aware of how the claims process works and how one policy may differ from the next. Some companies may only offer the cash value of possessions in a home while others may cover the replacement of the products. There are some companies that offer a claim upfront while others offer a certain fraction. These are important details that customers must be aware of before making a final decision.

In order to file a claim, a customer has to go through two steps; they must provide proof of possession of their valuables and verify their worth. Since coming up with proof can only be accomplished if one still has their possessions, it is better to do this ahead of time.

Taking inventory of all the possessions within the home, including the attic and basement is highly recommended. Buying floaters is another thing home owners seeking insurance must be aware of. Homeowners and renters policies usually limit the amount that can be collected on bigger valuables like jewelry, computer equipment, and collectibles and so on. It is recommended that receipts of new items are saved and insurance agents are made aware of any new purchases that might be expensive. The proof of purchase is vital in home insurance thus receipts and slips must be kept safe.

With the global economic environment, insurance companies are likely to keep changing their rates to keep pace with inflation. It is important to keep the homeowner’s policy updated as well, since through inflation the cost of rebuilding houses may vary.

Another thing home owners are supposed to consider is flood and earthquake insurance. Although this applies to people living in certain regions, it is still important to consider this insurance program. Buying an umbrella policy is also recommended, as it covers liability insurance which may be needed in case an individual is hurt on the home owner’s property. The most important thing however, is to ensure an agent is present before any home insurance policy is dictated so that they may allow the home owner an objective opinion as well as relevant information about the changes in policy.

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