Homeowners insurance provides protection for your home, personal property such as furniture, clothing, appliances as well as for personal liability. It protects you from a variety of events, including fire, lightning, burglary, vandalism, storms, explosions, and more.
Make certain that the company insuring your home is financially strong. Check for an A.M. Best rating of “Excellent” or higher. A.M. Best ratings are generally available in your local library. Be sure the company is easy to contact. Many companies provide an around-the-clock service center that can be called 365 days a year.
Your coverage should match the value of your home. Homeowners insurance can not cover the land your home is on, only the structure. That means that the insurance amount could be less than the purchase price or loan amount.
In general, replacement coverage means that in the event of a loss, the insurance company will pay what it costs to replace the property at today’s prices. Different insurers offer different levels of replacement coverage.
Homeowners insurance will also cover the property you own as well as the structure itself. Your clothing, furniture, appliances, and other belongings will usually be insured up to a maximum limit.
A homeowners insurance policy will frequently limit coverage on some special items jewelry, currency, works of art, etc. Homeowners who need additional coverage on these items can usually obtain it for an additional cost.
If your property is officially designated as being in a special flood hazard area, you must obtain flood insurance. While the federal government provides most flood protection, you are responsible for applying and obtaining this coverage. It’s important to know that flood insurance is not included in a standard homeowners policy. Even if your home is not in a special flood hazard area, you may wish to consider whether you need flood insurance.