The 411 on Homeowners Insurance
Homeowners insurance is designed to protect the insured from damage or loss to their property when some kind of covered loss event happens. It is also meant to cover a property owner from liability resulting from damage or injury due to the policyholder’s negligence on his or her property. In many cases, homeowners’ insurance will cover losses or damages that happen off the insured property as well.
Homeowners’ coverage is also available for those deemed as additional insured under the policy. Those are normally the other residents of the household, such as family. It is wise to be familiar with your policy so as to know who is insured through the policy. When one has a mortgage, one will have probably made an agreement to also insure the lender through a clause in the insurance that protects the lender’s interest in the property. If you stop paying your premium and your insurance lapses, the lender will have its own coverage maintained for obvious reasons. Keep in mind that you will not be off the hook however, as if there is damage or loss, you’ll be personally responsible for out-of-pocket costs.
The home insurance policy details will specify what is covered for damage and loss. This will normally include the actual structure and any personal items. Should a policyholder have valuable personal belonging within the home, such as jewelry, art, a coin collection, etc., then he or she should probably purchase special coverage. If you don’t acquire the special coverage, your insurer will likely only pay out to the limits of its maximum coverage of around $2,000 for even a piece of personal property that far exceeds that amount.
As far as premiums are concerned, keeping costs down is possible by insuring a home for actual cash value rather than for replacement cost. However, if you purchased a home in 2005 for $500,000, it may be valued presently at $345,000. Should it be destroyed, it would be extremely unlikely that one would be able to replace it for $345,000. For that reason, it might behoove one to contemplate having the home insured for replacement value, which would make it far more easy to replace and make the extra premiums paid all the more reasonable. There are other benefits from insuring a home for replacement value; speak with an insurance professional to find out more.
For most, practically all that they own is within the walls of their home. Accidents can happen anytime so go over your coverage with an agent.