Our homes are more than just assets. They’re safe havens for ourselves and our family. That’s why protecting them with insurance is a must. Here’s what to look for when it comes to homeowners insurance:
Make Sure You Can Rebuild
The highest sweeping coverage you could buy is a Homeowner 3. A cash-value policy may leave you vulnerable since it covers only the depreciated value of your home. Instead, you should opt for a guaranteed replacement plan. This would cover the cost of rebuilding.
Rent Coverage
It may take months or even years to rebuild or repair. A loss-of-use clause can cover living expenses over and above your normal costs. Most of the time, this insurance is capped at 20% of your home’s coverage, but some insurers could let you purchase more.
Protect Your Property
Coverage for your belongings inside your home is calculated as a percentage of your home’s value – typically 50%. Luxury items like jewelry, art, and electronics are subject to replacement limits of $1,500 to $2,500 per item.
A helpful tip is to not rely on your memory. Instead, photograph or videotape your possessions, and keep this in a safe-deposit box or another secure place outside your home.
Guard Your Assets
You could need more liability protection than what a standard policy offers. So, if you’ve got a dog, swimming pool, home-based business, teenage kids, a high-profile job, or a job that has the appearance of deep pockets, you’re open to a lawsuit.
Take Care of Business
If you work from home, you’ll need a home business endorsement to cover your equipment and liability.
Prepare for a Deluge
Homeowners’ policies don’t cover floods, earthquakes, and sewer or storm-drain damage. You should consider buying flood insurance from the Federal Emergency Management Agency. The policy may cost an average of $372 a year more if you live in a high-risk area.
