How to Choose Home Owners Insurance

When you own your own home, you need to learn how to choose home owners insurance. The “real” options can be simply understood but they are often candy-coated behind other seemingly important yet totally unnecessary options. 

One thing you need to know before you begin is that most of the inclusions that you might assume are included in the policy are not and need to be added separately. Here are some tips on how to choose home owners insurance.

1-LOCATION: You need to consider your location and things that could happen in your area that might damage your property such as flooding from rain, river flooding, likelihood of crime or a busy social life. If your select area is prone to these events, the cost of insuring your property against them will raise the cost of insurance and will vary with different insurance companies, so check out each potential broker carefully.

2-REPLACEMENT COST: Many policies automatically only cover the original cost of your property and not what it will cost you to replace or repair them. Make sure the policy covers the replacement value of all property including expenses for repairs and replacements.  This will not be automatically included in the basic policy.

3-CONTENT COVERAGE: Home contents are often not automatically included in the basic policy and will have to be added on. You’ll know it’s added on when you are asked to provide a list of your contents.  You need to know that it is included and some companies will simply ask you for a dollar estimation of the value of your contents. Again, make sure that the content coverage is for “replacement value” and for for the base value or original price you paid for it.

4-BURGLARY COVERAGE: This is likely another add-on that you will have to request for both your building and your contents. This coverage is for all your contents both inside and outside your building and includes things stolen or lost when they are removed from the property such as laptop computers, jewelry, bikes and automobile contents.  

5-WATER DAMAGE: Not all policies cover sewer and water damage caused by things such as bathtubs overflowing, burst pipes or tree root clogged sewers.  However, for an added expense, many policies will add them onto the base policy.  Be careful not to assume flooding is not going to happen to you because if and when it does, the cost of the damage can be overwhelming.   

6-STORM AND WEATHER DAMAGE: Most basic insurance policies do not cover this type of damage, and depending on your geographical location, they may not be offered even as an add-on by some insurance companies. Sometimes in areas where specific weather or climatic conditions are common such as hurricanes or earthquakes, coverage only comes with a separate insurance policy that can be very expensive.  

7-COLLECTIBLES: Most insurance companies require a separate policy for collectible items such as jewelry, artwork, paintings, coins or anything that is deemed a valuable collection. Don’t assume that your basic policy will cover the full cost of lost or stolen collectibles, so protect yourself and get them insured.

Many people are forced to select their policy coverage according to what they can afford to pay each month. However, there are some inclusions such as the ones above that should be considered as essential coverage for you and should be included. If there’s a chance it could happen to you, you want to know that you’re covered.