As your most valuable asset, your home deserves the best protection. Home insurance protects you against your biggest fears, as well as things you didn’t even know could go wrong. Here’s what you should know.
What Does Home Insurance Protect?
Just saying your home insurance protects your home doesn’t tell the full story. It provides more protection than just your home itself. You also need to make sure you have the right coverage options for each scenario. There isn’t one uniform home insurance policy. It all comes down to what you choose.
For Your Home
The structure of your home is one of the most important things your home insurance policy protects. Dwelling coverage covers things like hail damaging your roof, lightning strikes, fires, and even vandalism. Depending on how bad the damage was, this coverage can either pay for the repairs, rebuild your home, or give you the cash value towards a new home in a new place.
Unlike other types of insurance coverage, you don’t usually pick specific limits. The price you pay is based on an appraisal of your home, and you’re covered for your home’s full value. However, there may be limits on increases in construction costs or other types of inflation, so be sure you understand how the policy you’re considering adjusts over time.
For Your Belongings
If there’s severe damage to your home, there’s also a good chance you could lose personal property like clothes, furniture, and electronics. You may also face hazards like a burglary. Personal property coverage protects the contents of your home. To be fully covered, you’ll want to select a limit that’s at least equal to the value of your current possessions, and update it after any significant purchases add to the value of what you own.
For Your Valuables
Sometimes, your personal property coverage just isn’t enough. It may cap what it will pay for things like electronics, jewelry, art, and collectibles. This could be per item or for the total loss of items of a particular type. If you have valuables exceeding these limits, you may need to add additional coverage.
If you ever get sued because your dog bit someone, or you accidentally caused property damage, your home could be at risk. If you lose and aren’t able to pay the judgment with cash, you may have to sell your home. That’s why most home insurance policies include liability protection. In addition to paying potential damages, your liability policy may also cover the costs of your legal defense.
Another option you can add is guest medical payments. This will pay for minor medical bills if a guest is hurt on your property no matter what happened. The main goal of this protection is to avoid a more significant liability claim.
For Your Extra Expenses
If a fire or other disaster makes your home unliveable, knowing your home will be rebuilt is a small comfort. You need to figure out where you’ll live in the meantime. Additional living expenses covers things like a hotel or short-term rental, the extra cost of eating out for every meal, and similar expenses.
What Doesn’t Home Insurance Cover?
Even though home insurance covers a lot, there are still things that home insurance doesn’t cover. These are some of the more common examples, but remember to check your specific policy.
- Earthquakes. Earthquake protection falls under a different type of insurance policy. You may need to get it from a separate company, or your home insurance company may offer it as well.
- Floods. Flooding from outside of your home is like earthquakes. Most standard policies do not cover it, and you need to buy the coverage separately.
- Mold. Mold coverage depends on whether it was due to a separate covered incident or lack of maintenance. For example, if a storm damages your roof and mold grows while you’re working on getting it repaired, that may be covered. If mold grows in your humid basement, that probably won’t be covered.
- Termites. The reason that termites typically aren’t covered is that even though they do a lot of damage, it takes time for them to get inside. You can prevent termites through pest control and regular inspections of your home.
Who is Home Insurance For?
Home insurance is typically for the owner of a house who is living in it. If you live in a condo, you need condo insurance. If you rent, you need renter’s insurance. Landlords may need landlord’s insurance as home insurance may not cover some or all rental activities. All of these policies have similar types of protection. It’s just a matter of picking the right one for your situation.
Can You Drop Your Home Insurance After You Pay Off Your Mortgage?
Paying off your mortgage might be the worst time to drop your home insurance. The reason your lender requires you to have home insurance is so that they can still be repaid even if your home is destroyed or severely damaged. If you don’t carry the same protection for yourself, you could be left starting over with another 30 years of mortgage payments to rebuild your home. Also, remember that your liability coverage and other protections can help keep you from losing your home for specific financial reasons.
Talk to Your Insurance Agent
Your independent insurance agent can help you choose the right coverages and limits and then help you quickly get quotes from multiple insurance companies. Sagen & Associates Insurance has locations in Shawano and Brodhead, WI. Contact us now to get started or to learn more.