Homeowners' insurance is not a luxury but a necessity. While the driving factor behind getting the policy is that it protects you against theft or damage, nearly all mortgage companies now require borrowers to get their properties fully insured. If you choose not to comply, it is almost impossible to obtain finance for your home.
Even if you don't own a house, you may sometimes be required to get a renters' insurance policy as well. However inconvenient or excessive it may seem, it is smart to have this kind of policy.
What Is Homeowners’ Insurance?
The standard terms also typically cover the cost of repairs or replacement of HVAC systems and their components, in addition to covering the outbuildings and main structure.
Homeowners' insurance also provides coverage to valuable personal items in case of theft or if they are destroyed or damaged. The policy also pays for legal and medical expenses if anybody besides you or your loved ones is injured on your premises.
Where Do I Buy Homeowners’ Insurance?
Insurance company websites are your best bet to get you started. They list all their plans, what's covered and what's not, and how to get in touch to discuss more. Many also have estimation tools on their site to help you determine the premium cost. You just need to enter some basic information about your home and its contents.
However, given the options available in the market, it may be confusing and time-consuming to find a policy that meets your requirements. To save you the headache, you can choose to use the services of a licensed insurance agent or independent agent, who can get you quotes from many different companies and help you get the type of policy you want. Regardless of what route you choose, getting the help of an agent is beneficial, especially if you are a first-time buyer.
The National Association of Insurance Commissioners and state insurance agency websites are also great resources to use.
How Do I Buy Homeowners’ Insurance?
First, you need to decide what you want coverage for. The next steps are to determine how much insurance you require, and finally, pick an insurance company and policy that meets your requirements.
Deciding What To Cover
Standard policy terms may not be enough to cover your belongings, especially if rebuilding costs are more than average where you live or you have high-value art, jewelry, kitchen appliances, or other valuables. If any of these factors apply to you, it's best to consider getting additional coverage, as many policies can be customized to your needs.
Deciding How Much Insurance You Need
This can get a bit complicated - you will need to calculate the replacement cost of your home, inventory and calculate the cost of your possessions, and also determine the price of the pool, fence, gazebo, or any other stand-out structures you may have. An insurance agent can help determine these costs. However, to get a rough idea, use this formula:
Square footage x local building costs per sq. ft. in your locality. If your home is 1,500 sq. ft and local building costs come to $70/ sq. ft, the cost of rebuilding your home will be $105,000.
Here are other things to consider:
- The more detailed your inventory is, the better. It should include details of where and when you purchased those items.
- Always remember that replacement cost is different from the cost of the asset. Replacement cost is the price you would pay today to replace an asset, and it will rarely be the same as what you paid initially.
- Remember to include outdoor furniture and appliances.
- Document what you own, either via pictures or videos.
Choosing An Insurance Company
Here are factors to consider while choosing an insurance company:
- It provides coverage where you live,
- It offers good discounts and competitive rates,
- It has credible reviews from genuine policy buyers and professional sources.
- It has a strong financial rating.
- It offers round-the-clock assistance through a local agent, website, or live customer team.
While an insurance policy is necessary, it also has its own set of complications, and Englander Peebles has worked with enough homeowners to witness this firsthand. If you are facing any issues with your claim, we'd be happy to assist you. Our property insurance lawyers have years of experience in claims involving fire, hurricanes, storms, smoke, and other types of damage that residential properties face.
We know the reality that insurance companies often tend to decline claims for no good reason, try to intimidate you with legal jargon, pay low settlements, or delay payments. We do everything in our power to ensure our clients are shielded from these issues as much as possible as we fight on their behalf. Contact us now for an initial free consultation.