| Home Insurance Policy Basics Homeowners Need To Know |
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| Written by Ken Henry |
| Tuesday, 02 March 2010 17:06 |
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There are two times that homeowners typically think of home insurance. Once when it is time to pay the bill and again when the insurance is needed the most, at a time of loss. You need to know if your home insurance policy covers the right things before you pay for the policy. Choosing the correct insurance can make a difference in being able to replace a home or having to settle for much less than the standard you have come to accept. Every homeowner should review his or her policy annually in order to be sure that he or she has the correct amount and type of insurance.
There are two times that homeowners typically think of home insurance. Once when it is time to pay the bill and again when the insurance is needed the most, at a time of loss. You need to know if your home insurance policy covers the right things before you pay for the policy. Choosing the correct insurance can make a difference in being able to replace a home or having to settle for much less than the standard you have come to accept. Every homeowner should review his or her policy annually in order to be sure that he or she has the correct amount and type of insurance. Most home insurance policies cover fire damage, hail or windstorm damage, water damage except from floods, riots or explosions. They also cover losses such as theft. If you must live somewhere else while your home is being repaired or even rebuilt, the policy will usually cover this expense. If there is any legal liability caused by a person being injured while on your property, the insurance will cover that liability. Both the homes structure and your belongings are covered by a home insurance policy. There are three kinds of policies for covering the structure of your home. Replacement cost insurance pays to cover the cost to repair or replace your home if is damaged or lost due to one of the aforementioned reasons. There is no deduction for depreciation. There is a maximum amount that the policy will pay. An extended replacement cost home insurance policy gives you an additional twenty percent protection if construction costs suddenly increase. This can happen after a major storm when contractors are very busy replacing or repairing many homes. The least expensive policy is often the cash value home insurance. This type policy depreciates the value of items based on their age and use. If a roof has been on the home for half of its ten year lifetime, the insurance will pay half the cost of the roof if it is damaged. This could mean that you will pay a significant amount of money to replace items that are damaged that replacement cost insurance would cover fully. You will want to have enough insurance that you can rebuild your home even if it is completely destroyed. The cost to rebuild can be different from the market value or purchase price of a home. Unless you have the right amount of insurance to rebuild your home, there may only be enough money to pay for part of the repairs or replacing of destroyed items. If you know the cost per square foot to of building in your area, you can multiply that cost by the square footage of your home to get a basic replacement cost for your home's structure. There are several other things that can increase replacement cost of your home including the type of outer walls, number of bathrooms, style, fireplaces and attached garages. Special features or upgrades in the home will also add to construction costs. Changes in building codes can also make a significant difference in the cost to rebuild a home since new construction must meet new building codes. Make sure that your insurance is satisfactory to your lender. They normally require that you have enough insurance to cover what you owe on your home. DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. If you are searching for home insurance, look no further than http://www.henryinsurance.com/ to find the best suitable homeowners insurance to fit your finances. |