Home insurance is in no way a luxury. In fact, most lenders will require you to take homeowners insurance for you to qualify for a mortgage or any home loan. Over the last few decades, many homes have been destroyed by fire, hurricanes, and tornados and left millions of people homeless.
Today, even landlords require their tenants to have renters insurance to protect their premises and the things inside. However, home insurance differs from one policy or company to another. Depending on the value you have put on your home, here are the 5 most important features you should look for in home insurance.
- Replacement and repair of the structure
The basic coverage in every homeowner insurance is to protect the structure that is the house and its structural components. These include the plumbing, electrical wiring, AC, and anything else holding the structure together. If the house/building is destroyed by fire, hurricane or vandalism, the coverage can pay you to repair it or build a new house altogether.
However, the land where the house is built is not covered which means that damage caused by earthquakes will also not be compensated.
- Contents of the home
The homeowner’s insurance also covers everything that is inside that house. If your furniture, electronics, appliances, and clothing are stolen or destroyed, you will be compensated to buy new ones. Depending on the company, you can get the real value of the contents or the current value after they deduct depreciation.
Sometimes the insurer will not compensate the full amount of very expensive jewellery, firearms or antiques but they do cover everything else. You should look into what the contents of a ‘home’ mean in every policy just like you do when comparing mortgages.
- Additional structures
Do you have a garage, swimming pool, servant quarters or a perimeter wall? These are additional structures that may not be attached to the main house but should also be covered in the home insurance. It can be very costly for you to replace some of the structures on your own and they are just as important as the main house.
- Additional/alternative accommodation
In the unfortunate event that your home is destroyed, you need a temporary place to live as your home is being repaired or rebuilt. This could mean checking into a hotel or renting an apartment in the meantime. The amount of money you will spend on this kind of alternative accommodation should be covered by insurance.
- Liability coverage
This component takes care of any third-party injuries or property damage that may happen in your premises. For example, if a friend gets injured badly in your property, the insurer should pay for their treatment. If your tree falls and damages your neighbour’s house, the insurer can help take care of that damage.
Many people don’t pay attention to this coverage because liability is very rare in homes but it’s important. The standard coverage can range from $100,000 to $300,000.
Doing your due diligence and comparing a couple of policies is crucial so you can get everything you want from the cover. You also get to compare premiums and understand things that can lower your premiums annually.