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.  If you are making an all-cash purchase, you are not required to have insurance.  However, since your home is a huge investment 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, because 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.

Here are the five coverage areas of the most basic home insurance policies:

  • Dwelling coverage — this is what covers your home.
  • Other property — this is what covers detached structures on your property.
  • Personal property coverage — this covers the items within your home
  • Liability coverage — this is what covers you in case a visitor suffers a serious injury and sues you.
  • Additional living expenses — in the case of a catastrophic event, this coverage provides you living space, if your home becomes uninhabitable.

You may hear the term “covered perils” when researching insurance.  Covered perils include:

  • A home fire
  • Lightening
  • Vandalism
  • Theft
  • Hail
  • Water damage as a result of bursting pipes

Covered perils cover some of the most common events that take place.  We advise that you check with your insurer, as some of these may require additional coverage.

One area of coverage that you should never assume is included in your home insurance policy is flooding.  Many insurance policies require specific flood insurance.

It’s always a good idea to read the exclusions section of your home insurance policy because understanding what your insurance policy will and won’t cover is important.

Get Additional Coverage for Your Valuables

It’s important to note that there are limits on the compensation for expensive possessions such as artwork and fine jewelry. You can always add additional coverage by paying extra on your policy each year, which may bring you extra comfort if you fear those items may not be covered.

When you start looking for homeowners insurance, don’t just go with your car insurance company or your family’s insurer. Of course, 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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