7 Tips to Buying and Getting the Most Out of Home Insurance
Many people think of home insurance as a necessary evil. The truth is that it might feel like that, but only until you need it. At that point, it will feel like a savior. You'll definitely be very glad you have home insurance when you get your financial life back.
Home insurance is meant to protect what's very likely your biggest and most valuable asset.
You've worked hard for what you have. You put in much time to be able to afford your home, and you now put in much time and effort in keeping up with that home. Therefore, it only makes sense that you you need to protect it from the myriad of things that can cause it harm.
The big problem is that most people are confused when it comes to insurance in general, much less something as important (and sometimes complicated) as home insurance. There are things that you need to understand about home insurance ahead of time, before an instance occurs where you end up needing it.
So in this post, we're going to give you...
One of the most important things to understand from the very beginning is how much insurance you'll need. First you'll need to know the actual value of your home. If your home is damaged or destroyed, you're going to need to know what it will cost to replace the entire structure... or that portion of the structure which is damaged.
A home builder or assessment company should be able to give you the truest value.
This is not a time to guess. Establishing your home's value is not a do-it-yourself project. Nor is it a good idea to allow your insurance agent to be the one to solely establish that value. Again, this is your biggest asset and you'll want to be sure you've got the fairest value.
Things like the crime rate in your neighborhood, your living habits, where on the block your home is located, how close you are to highways and busy areas, trees around or near your home...
Going into it with this knowledge will actually help you and we’ll better explain how in Tip #3...
For instance some things that might earn you a discount include:
• A home burglary alarm system
Basically... anything you can think of that might make your home safer, and less likely to catch fire or injure a guest or passerby can give you a discount on your premium. Furthermore, having good credit can save you money as well.
This also is not a time to guess. You likely have about $20,000 worth of personal possessions in your home at any given time. Looking around your home you may not realize that, but it's absolutely true.
So make a list of all your belongings and the value of those belongings based on receipts and purchase dates. This way if you ever need it you'll have a concrete list, and not something constructed from memory, where things could get forgotten or undervalued because you have no proof.
You may even want to take photographs of the items on your list, and definitely keep receipts for all new items purchased.
If you leave it laying in a filing cabinet or shoebox inside the home, chances are in the case of a fire or some other tragedy you will no longer have that list. That’s why it is recommended to keep the list inside a fire-proof safe (along with your insurance policy, copy of your mortgage, and important papers for family members)...
However, it's crucial that you know what you're covered for so that when it comes to filing a claim you're absolutely prepared.
Understand that you you'll likely not be covered for things like floods or earthquakes. These will be things that you'll have to decide on getting extra insurance for.
If you don't understand your policy take it to someone who does and have them look it over and explain it to you. A real estate lawyer, an attorney or accountant, anybody who can read and comprehend it better than you would be a good choice. If anything, simply write down the things that you don't understand and bring those questions to the types of people who will.
So there you go. While there are plenty more tips we may cover in more detail in a later blog post, these are some basic things that you'll want to think about when it comes to home insurance.