Homeowners buy home insurance so they can protect themselves against major financial losses if an event were to damage their houses or the contents in the houses.
Building or Dwelling Insurance This part of the insurance policy covers the actual building. This means the insurance company will pay the amount necessary to repair or replace the house structure, plumbing, electrical wiring, heat and cooling systems, and built-in appliances in the case of a damaging event.
Contents Insurance This part of a home insurance policy covers the personal property of the people who live in a home, such as clothes, furnishings, appliances, and other personal items. Cars are not included. If a robbery occurs, then this part of the policy will pay for the items stolen.
Legal Requirements If a person borrowed money from a lender to purchase a home, the lender requires the homeowner to purchase home insurance to protect the lender’s investment. The home policy coverage must be at least the amount of the mortgage.
Ways to Reduce Premiums of Home Insurance 1. Shop around 2. Increase the amount of deductible 3. Don’t insure the price of the building lot, just the replacement value of the house structure 4. Use the same insurance company for cars and home policies 5. Install dead bolt locks, security systems, and good fire alarms 6. Have no claims against the insurance company and maintain a good credit rating
Finding Home Insurance Finding a home insurance policy can be as easy as perusing the internet. There are online insurance quote services which compare insurance company rates. Also check consumer guides and with the National Association of Insurance Commissioners (NAIC) for information on various companies. Talk to local agents to find an agent that is comfortable to work with.
Things to Watch for 1. Read policies very carefully. Check to see what is covered in the policies and what is not. Home insurance policies have exclusions and exceptions, and some will place caps on the amount they will pay for personal property items. 2. Make sure the insurance company is financially stable.
