Owning a home is for many of us a dream that has been fulfilled. But it also comes with great responsibilities. One of them is home insurance, often also referred to as homeowners insurance. We can’t emphasize this enough: this is not a luxury – it’s one of those things no homeowner should be without. That is why nearly every mortgage provider will refuse to approve a home loan without proper insurance coverage. Let’s look briefly at why this is such an important issue and what the benefits of home insurance are.
What Is Home Insurance and Why Is It So Important?
The typical home insurance policy covers damage and/or destruction to a home’s exterior and interior caused by fire, wind, hail, smoke, falling objects, vandalism, and theft. It also often provides coverage against theft or loss of possessions.
Many homeowners insurance policies also include coverage against personal liability for harm or damage caused to other people and/or their property.
The Different Levels of Coverage Provided By Home Insurance Policies
Generally speaking, there are two basic coverage levels available. Let us take a closer look at what they are:
Actual cash value. In this case, the insurance company covers you for the actual cash value of your home and belongings minus depreciation. This means that even if you paid $200,000 for the property and subsequently spent $50,000 on furniture etc. if a fire or other insured event destroys everything you will only get what it was worth at the time of the disaster. This type of coverage is generally used for buildings that are in sub-standard condition and don’t qualify for a standard replacement cost policy.
Replacement cost. This provides a significantly better level of coverage than actual cash value. Generally speaking, it covers the full cost of rebuilding, replacing, or repairing your home and belongings in case an insured event happens, without any deductions for depreciation and using materials of the same quality and kind.
What a Typical Denver Home Insurance Policy Covers
Although home insurance policies can be customized to suit the client’s needs, most of them provide the following standard coverage:
Structural damage. This type of coverage helps to carry the cost of repairing or rebuilding your home’s structure if it gets damaged or destroyed by an insured event. It is highly recommended that homeowners should ensure that not only the primary structure of their home is covered, but also other structures – including fences, carports, detached garages, and sheds.
Coverage for your personal belongings. This type of coverage typically helps to pay the cost of loss of or damage to the things you own. Here we are talking of items such as furniture, computers, paintings, sound equipment, jewelry, etc. You can typically also add coverage for personal belongings that are stolen while you are not at home.
The majority of policies have a maximum amount for these items combined and they also have category limits. The typical policy also only provides cover for the actual cash value of these items, i.e. after making provision for depreciation, unless you choose to purchase an endorsement that increases coverage to replacement cost on personal property. We strongly suggest this coverage.
Costs you incur because you no longer have use of your home. Let’s say you temporarily can’t live in your home because it was badly damaged in a fire. Then this type of coverage could help to cover the cost of staying in a hotel or renting accommodation. It might even cover some of the cost of restaurant meals.
Liability Coverage. It is not only physical loss of your property that is covered, home insurance also includes coverage to pay for losses if you are sued by a third party for financial loss or injuries. It also includes members of your own household. If your mother-in-law should slip on your lounge’s very expensive Italian marble tiles during a visit and has to spend an extended time in hospital you will undoubtedly be very glad that you opted for this type of coverage.
Condo insurance. Condo owners are in a unique situation to the extent that the condo association’s master policy covers loss or damage to their property to a certain degree. But what about damages not covered by that policy? It might, for example, only cover rebuilding exterior condo walls. This means that you will have to get private coverage for flooring, interior walls, and countertops. An independent insurance agent can help you to secure coverage that picks up where the condo associations insurance leaves off.
Renters Insurance. If you are currently a tenant in somebody else’s home, it’s still a good idea to buy insurance that protects you and your property against loss. This is called renters insurance and provides similar coverage to what you normally find in the typical home insurance policy, including property damage liability, bodily injury, and personal belongings.
How An Independent Insurance Agent Can Help You Get The Best Home Insurance For Your Needs
By now you probably realize one thing: buying home insurance is not as simple as it looks. Many people find out too late that they bought the wrong type of coverage for their needs or failed to get coverage for a very real risk. An independent insurance agent such as Superior Insurance will first meet with you to determine exactly what your needs are. They will then get quotes from more than one insurer to make sure you get the best possible deal. You are more than welcome to contact us right now if you still have any questions.
