I’m Covered…Right?

Homeowner’s insurance provides people with protection against the unexpected. You never know what may happen, which is why it is best to always be prepared. The right insurance policy will protect you from basic incidents, but what about damage related to flooding, fires, and earthquakes? Many homeowners do not thoroughly read through their policy to find out what they are actually paying for. Don’t be surprised if an insurance company rejects your infestation claims, such as termites, as it may be considered an “additional coverage” option.

Mortgage Loan Requirements

If you have a mortgage loan, you are usually required to obtain insurance. Some mortgage providers will work the policy right into your loan while others may ask you to find the insurance independently. Comparing quotes and the policy limitations is vital to selecting the best insurance provider. If you have a vehicle, contact your insurance provider and find out if they can offer you a bundle plan. This is a great way to save on the monthly premiums you will need to pay. The costs you pay in monthly premiums are based on the following criteria:

• Claim history
• Education level
• Financial history
• Job stability
• Age
• Location

While the cheapest plan may be the best financial decision on a monthly basis, there is a good chance it can come back to haunt you. Consider how much money you will need to spend if your home is damaged from a natural disaster. If you failed to pay the extra $5-$9 a month for earthquake coverage, you could lose your home and all your belongings. Always plan for the future when selecting insurance.

What Does My Policy Cover?

Most homeowners assume that insurance companies will pay for flood damage. The problem is that there is a fine line in each contract. Your plan may cover flooding from a natural disaster, but it may not cover flooding due to a broken pipe inside the home. However, in most cases separate flood insurance is required for coverage. Fire damage is another thing that you must research. Insurance plans usually will not pay for expenses related to fire damage due to negligence. Therefore, if you accidentally leave your curling iron on and it starts a fire, you will need to assume the costs.

Some homeowners do not realize that liability coverage is part of their insurance plan. A person who falls or is injured on your property can sue you for damages. Depending on your plan, the insurance company may step in and try to settle the case. In most situations, they will pay for medical expenses related to the injury. Make sure you are buying enough liability coverage if you have pets or a home that could be considered dangerous (due to an icy porch, etc.).

Did you know that in the event of a fire or other emergency the insurance company will pay for a hotel room? This is another area where you must read the policy as it may state that the company will only pay for a specific number of days during which your home is deemed “unlivable.”

What You Need To Know

When searching for an insurance company, find out what it would cost to replace your home. Once you know this cost, get an estimate of the assets and belongings inside the home. Now, take this figure and add $10,000-$15,000 to get the ideal coverage limit for your home. It is important to document everything that you are listing in the homeowner’s insurance policy. This will guarantee replacement or financial compensation for items that are damaged.

Homeowner’s insurance is vital for your family in the event of an emergency. Take the time to plan ahead and prepare your family for a disaster. Keep enough money in your bank account to pay the deductible and allow the insurance company to take care of fixing your home.

Guest Post By:

This article was contributed by Kelly Springwell, DIY-er, house flipper and safety nut. Kelly knows disaster can strike your home in the least expected ways, which is why she recommends New England Termite Control, quick and affordable pest control services.