What to look for in Homeowner’s Insurance Policy

Author: Jim Knight

The homeowner's insurance policy is meant to protect more than just your home. This all-inclusive insurance policy protects your home and everything within. This type of policy also offers liability protection meant for you and your family. The area of your residence largely decides the cost of your insurance. However, there are several other factors that you should look at while buying home insurance policy. To make sure you get the best plan to suit your needs at the best price, consider the following factors:

(1) Coverage for the home

Your home is one of the biggest investments you will ever choose to make. Make sure your homeowner's insurance policy insures it in its totality. The homeowner's insurance does not cover damages caused due to floods, earthquakes or other natural calamities. If you live in an high-risk area, you must look for and consider buying separate insurances.

The general homeowner's insurance policy, based on the HO-3form, protects the house from incidental damages like smoke, fire, riot, hail, falling objects, aircraft, explosion, vehicles, sleet, snow, wind and theft.

Make sure that your plan assures a committed exchange price policy, which provides increased amount of protection for all your assets and home as compared to the actual cash value scheme. For instance, if your house is broken and your policy is for $120,000 but the costs to redesign your house comes up to $145,000, without a guaranteed exchange plan you are required to shell out the additional $25,000 out of your own pocket.

(2) Coverage for possessions

Homeowner's insurance policies should also cover your personal possessions. In a fundamental policy, the insurance companies may permit up to 40 percent of the whole policy to account for your personal possessions. There may be a set max limit, for example $2,000, of what the insurance company will prefer to pay per item. Try and make sure that you have the adequate amount of protection for high priced items like jewelry, electronics, collectibles, fur coats or costly clothes.

The insurance company may need an appraisal. Click pictures or shoot videos of your assets and keep records of the home inventory. Look for policies that also cover landscaping. If the values of your assets decline over the time make sure to adjust the policy so you don't pay more for items that are not precious.

(3) Liability

A typical homeowner's insurance policy must comprise $100,000 in liability insurance. Liability safeguards you and your family in cases of other people being damaged in your residence, such as your neighbors hurting themselves in your residence, or your pet destroying your neighbor's yard. Owning pet animals, a swimming pool, or a home-based business may put you at higher risks for lawsuits. So, look for more liability.

(4) Lowering your premium

Houses located near fire stations or fire hydrants may nab lower insurance rates. Additionally, installing a security system, fire retardant roofing, smoke alarm and deadbolt locks in your home may further lower your premium. You may further lower your premiums by buying your car and homeowners insurance policy from the same company.

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