What is Covered by a Homeowners

Insurance Policy?

A homeowners insurance policy protects your house, youir belongings, and your other assets in case of theft, fire, accidents, etc. A typical Homeowners insurance policy (called an HO3 policy) protects you from stuff like fallen trees and fires. Notice we did not mention earthquakes and floods —such events are typically not covered by a regular policy and need extra coverage. A regular policy will protect your belongings from said disasters in addition to theft. However, a regular policy isn’t a blank check: there is likely to be a limit to how much the customer is compensated. In case you have valuable stuff, like artwork or jewelry, you could pay more each year for insuring them to their entire replacement price. Now, in the event somebody is on your property and slips and injures his/her ankle, he/she may sue you for his/her medical expenditures. Home insurance can cover your liabilities in such situation also. This type of insurance isn’t essential by law, similar to an auto insurance. However, mortgage companies normally need you to purchase a policy prior to offering you a loan.

The Amount of Coverage Required:

A home insurance policy will cover enough to completely rebuild your house in case it got destroyed. It is best to get an estimate from a home builder as to what it may take for reconstruction; that amount can be the basis for the total replacement coverage you will require. Make sure you highlight any expensive and/or unique details which may add to the replacement expenditures. After determining the replacement cost of the house, you will want to know what type of coverage will be most suitable. Some key terms for this are given below:

Coverage for Guaranteed Replacement Cost

Meaning the insurer will be paying for the reconstruction of your house irrespective of the cost. Such policies are tough to find presently.

Coverage for Extended Replacement

Most insurers provide coverage which caps the payout at about 125 percent of the insured value of your house.

Inflation Guard also called the Inflation Guarantee

The feature ensures the insured value of your house stays up to date with the marketplace. By getting a reliable assessment, an  inflation guarantee, and extended replacement coverage, you’re likely to be in a better shape. The appraisal offers a realistic initial figure while the inflation guarantee ensures the price of your house stays current. The 125 percent coverage means that even if construction figures outpace inflation, they didn’t outpace it by 25 percent, hence you need to have enough cash for whatever job you want to complete.

Things to Note

You must not use the policy for covering every imaginable expense, only the major ones. In case reinstalling a sewer cost you 200 bucks, pay the expenditure — do not file claims for it. The policy providers dislike it if a customer files preventable claims, and might raise your scheduled premium or even cancel your coverage since they will consider you too risky.
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Six Do's and Don'ts of

filing a home insurance

claim

Want to know the right way to file a claim. Here’s how: The most common home insurance claims are related to hail or wind damage. Storms can damage shingles and cause roof leaks.   The most common home insurance claims are related to hail or wind damage. Storms can damage shingles and cause roof leaks. An insurance claim is filed by owners of about one in 15 insured homes each year, according to the Insurance Information Institute.   An insurance claim is filed by owners of about one in 15 insured homes each year, according to the Insurance Information Institute. The most common home insurance claims are related to hail or wind damage. Storms can damage shingles and cause roof leaks.   The most common home insurance claims are related to hail or wind damage. Storms can damage shingles and cause roof leaks. An insurance claim is filed by owners of about one in 15 insured homes each year, according to the Insurance Information Institute.   An insurance claim is filed by owners of about one in 15 insured homes each year, according to the Insurance Information Institute. Your home exterior's No. 1 enemy: Mother Nature. From summer storms to freezing winters, extreme weather can hit during any season and wreak havoc on your home's windows, siding and roof. That's why you have home insurance, right? Yes and no. Read the entire post  
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