House Insurance
by Ellise Walsh

Buying a home is the biggest financial commitment most people will make in their lifetime. It makes sense to protect that investment against unforeseen circumstances and against the wrath of nature. We’ve all seen the pictures on the news of damage caused by fire, flood, earthquakes, mudslides and other natural disasters. Most homeowners choose to buy a house insurance policy to cover the cost of rebuilding their home should disaster strike. A good homeowner’s insurance policy will also cover the possessions in the home against theft and damage.

When shopping for house insurance, the first thing to determine is how much insurance you need. It is better to insure your home based on its replacement costs rather than on its value. Home prices tend to rise over time, sometimes significantly. If you insure your house for the purchase price, you may be looking at a huge difference between what the house insurance policy will pay and what it will actually cost to rebuild your home.

Make sure to ask your insurance agent if you are covered for replacement value. If the policy is written to cover only the purchase price, make sure it is rewritten to cover replacement cost instead. There is usually not a big difference in premiums between the two types of coverage. Even if there is an increase, the peace of mind you gain will make it worth your while.

When shopping for a house insurance policy, do not overlook the importance of insuring the items in the house as well as the house itself. Have you considered how much it would cost to replace your furniture, for instance, in the event of a devastating fire? What about the cost to replace your new flat screen television if a thief sneaks in some night and helps himself to your valuable possessions?

Most homeowners insurance policies have provide a standard level of coverage for the possessions inside the home. This coverage level is often tied to the value of the home itself. Make sure that the standard coverage would be adequate if you had to repurchase everything in your home, from your furniture to your clothes to all your appliances. If you do not think the coverage is adequate, you may wish to purchase additional coverage.

Likewise, if you keep antiques or collectibles in your home, you may need to insure them separately. Always discuss items of great value with your insurance agent when shopping for a homeowner’s policy. Things like antiques and collectibles may need to be insured separately. You may need to have an appraisal done to assess the value of the items to be insured.

If you run a business out of your home, you will want to make sure your level of coverage is sufficient to cover the cost to replace all of your equipment and get your business back up and running as soon as possible. Be sure to discuss anything out of the ordinary with your insurance agent. Remember that house insurance policies are written with the average homeowner in mind. If you don’t fit the typical mold, you may well have to make some changes to the policy before you sign.

In addition to protecting your home and your belongings, homeowners insurance policies typically provide a level of liability insurance in case someone is injured on your property. Be sure to read this section of the policy very carefully, and make sure the coverage limit is adequate for circumstances you are likely to run into. If you have aggressive dogs, or other animals, be sure the house insurance company will cover you should they bite or otherwise injure someone.

As with any other financial committeemen, always be sure to read the fine print on your house insurance policy. You may even want to have your attorney take a look at the policy to make sure you are adequately protected. After all, the idea behind insurance is to allow you to rest easy knowing that you are protected should disaster strike. You want to make sure you are comfortable with your homeowner’s coverage before you sign on the dotted line.

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