You’ve built or bought the home of your dreams — how can you protect it and your belongings in case of disaster? Homeowner’s insurance is so key that many of us can’t buy a home without proof of it. However, many of us aren’t sure exactly what we need, or how much of it we need. Let’s dive into the specifics to learn more.
Protect Your Structure With Dwelling Insurance
Dwelling insurance protects the physical structure of your home, and is the money the insurance agency will pay you in case of destruction from disasters like fire or storms.
Repairs and rebuilding are paid for up to the limit of your coverage, so working with an insurance provider to determine the exact value of your home, and the cost of rebuilding it, is essential. Remember that in case of large-scale area disasters, such as floods or storms, the cost of building materials may rise, so be sure to include this potential for inflation in your estimated coverage cost.
Protect Your Belongings With Personal Property Insurance
Personal property insurance protects all the things inside your home. Oftentimes the coverage limit for your items is calculated by using a percentage of your dwelling insurance. For example, if your home is valued at $500,000, your insurance provider will estimate your personal property to be around 50 percent, or $250,000.
This amount varies depending on your unique situation, so it’s important to do an initial audit of your belongings (filming and taking photos during this process will help prove your belongings in case you need to file a claim). It’s also key to have a discussion with your insurance agent to update your estimated personal property every few years.
Protect Yourself (And Your Guests) With Personal Liability Coverage
Accidents happen. An old colleague slips on an icy sidewalk or a neighbor kid breaks his arm jumping into your pool. Unfortunately, when they happen on your property, you can be liable for paying medical bills and lawsuits — which is incredibly expensive if you don’t have personal liability coverage.
Knowing how much coverage you may need in case of emergency can be confusing, so talk to your insurance provider for estimates and expertise.
Protect Your Family With Loss Of Use Coverage
If your home is uninhabitable, loss of use coverage can pay for relocation and rehabilitation costs while repairs and rebuilding are finished. This type of coverage can also help pay for your living expenses, so calculate carefully what you may need in case of crisis.
Including replacement coverage in your policy will require insurers to reimburse you for the actual cost of buying your items new, as opposed to the current cash value of the product as-is. You can also ensure you get as much money as you need to replace your belongings by taking photos and videos of your belongings, and keeping receipts to file with your claim.
You should also consider an umbrella policy. Because umbrella policies are only meant to kick in after your home or auto insurance liability coverage has maxed out, the premiums are reasonable. It’s not impossible to purchase $1 million of coverage for a relatively small amount of money.
Buying home insurance doesn’t have to be complicated. At SFM Insurance, we know how important it is to feel secure in a coverage that was built with your specific needs in mind, instead of a cookie-cutter policy that so many others offer. Contact us for a free, no-obligation discussion about protecting your assets today. For more tips and our latest updates, visit us on Facebook, Twitter or LinkedIn!