What Type of Homeowner’s Insurance Should You Buy?

We live in a world full of options.  We are a society who wants immediate gratification.  The flipside is how we sort through all of the options so we can make an informed decision in the least amount of time possible and get the best deal while making it.

First off you will want to know if home insurance is necessary if you are paying with cash you are not required to have insurance, but your house is likely your largest investment, so it can be beneficial to have some sort of protection for that investment. If you are getting a loan for the home, in most cases the lender will require you to get insurance. The lender will want to protect its investment, and insurance is one of the easiest ways to do that.

Recommended Program: Home Plus Program

Once you determine that you will be purchasing homeowner’s insurance, it would be fair to say that you will likely be confused about how much insurance coverage you will need.  Simply stated, the coverage on the insurance policy should reflect an amount that can adequately take care of the cost of rebuilding and refurbishing your entire house in the event that you lose it completely.

The most basic home insurance policy usually covers at least five coverage areas:

  • Dwelling coverage — this is what covers your home.
  • Other property — this is what covers detached structures on your property.
  • Personal property coverage — this is what covers the property within your home
  • Liability coverage — this is what covers you in case a visitor suffers a serious injury and sues you.
  • Additional living expenses — this is what covers you in case your home is uninhabitable, and you need to live elsewhere.

You may hear the term “covered perils” when researching insurance.  Covered perils usually include the most common events that happen in your area, including fire, lightning, vandalism, theft, explosions, hail, etc. If your pipes burst and water damage occurs, you will usually be covered as well. There are some perils that require additional coverage, though, like floods.

Do not assume that your home insurance will protect you from flooding unless you get specific flood insurance.

It’s always a good idea to read the exclusions section of your home insurance policy. Understanding what the insurance won’t cover is just as important as knowing what the insurance will cover – before you have to make a claim.

Get Additional Coverage for Your Valuables

Homeowners are sometimes caught off guard when they suffer from a disaster.  It’s important to note that there are limits on the compensation for expensive possessions such as artwork and fine jewelry. You can obtain full coverage for them by paying a little extra on your policy each year.

When you start looking for homeowners insurance don’t just go with your car insurance company or your family’s insurer. You can start there, but get quotes from at least three insurance companies.  Home insurance is meant to provide a sense of safety and security. We have several companies that we recommend so please don’t hesitate to contact us if you need help with your new home purchase.

The Certo Team
55 N. Arizona Place Suite #103
Chandler, AZ 85225

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