Homeowners insurance coverage is mandatory for people who want to buy house (Majority of the mortgage holders require you to have it). Purchasing a house is one of the biggest investments for any person and it makes sense to protect this valuable investment. When you go to purchase a homeowners insurance policy, the most important thing that you should look for is the different coverages offered in homeowner's insurance policy.
The coverages offered differ with each Homeowners insurance policy and the insurance carrier. Hence, you should be careful while selecting the homeowner's insurance policy to protect your home from damages due to unforeseen events and perils. Standard homeowner insurance policies provide.
1. Broad coverage that includes damage to your dwelling and permanent structures present on your property( unless the reason or cause for the damage is not excluded from policy).
2. Damages to your personal property from the causes mentioned in your policy.
3. Limited coverage generally in the range of $500 - $2,000 for jewelry stolen from your house. (Majority of the standard homeowners insurance do not provide this coverage). You will need a homeowner's policy endorsement to get greater coverage.
4. Coverage for additional costs that you might face due to covered loss( for example you might have to stay at other place if your house is completely destroyed by fire and your house is not suitable for living until repaired)
Insurance is a product that is designed to help you get what you pay for. The least pricey home insurance policy will give you the least amount of coverage and vice-versa. The three different level of coverage provided are:
1. Actual cash value: This value includes the value of the house plus the value of your belongings after subtracting depreciation( for example the current worth of the belongings is considered and not the purchase value of the items)
2. Replacement cost: This value considers the actual cash value without deducting any amount for depreciation. This would help you rebuild or repair your house to the original value.
3. Guaranteed replacement cost: This is the most comprehensive level of coverage and this inflation buffer help you get any amount that is required to rebuild or repair your house. The insurance company will remit the amount even though it exceeds policy limits.
You should be aware that standard the home insurance coverage would not reimburse you for damages due to floods, earthquakes, hail, hurricanes, tornadoes or wildfires. You are required to take additional coverages for the above-mentioned perils, if your house is located in an area which are there is a high probability of such perils.