Knowing about insurance may not be the most enchanting subject, but it’s vital for new home buyers to understand the nuts and bolts of their homeowners’ insurance. Naturally, the majority of the mortgage lenders require insurance coverage to safeguard their investment. If the house you live in gets ravaged, the original owners (which in most cases is the bank), would suffer a huge monetary loss. Here is an insurance guide to help you understand the homeowners insurance process.
Generally, you do not even have to own your home to have homeowners’ insurance; if you are renting out a home, usually landlords require you to have coverage. Regardless, it is best to have this coverage as it can save you from an unforeseen event.
The principle of a standard homeowners’ insurance policy provides that the insurer will cover costs related to:
• Damage to The Interior or The Exterior of Your House – In a situation of destruction due to hurricanes, lightning, vandalism, fire, or other covered disasters, your insurer will compensate you so that you can restructure your house back to its original state. However, damage resulting from inadequate maintenance is usually not covered so, you may be required to purchase a separate insurance policy separate from the basic policy that provides additional benefits at additional costs, known as “riders”.
• Loss or Damage to Your Personal Belongings – General home appliances, furniture, clothing, and majority of the other goods in your household are covered if any damage were to occur from an insured disaster. There is an option of “off-premises” coverage which can be obtained by paying premium for your other goods such as, jewelry. For example, if you are wearing your jewelry and you lose it anywhere in the world, the limit set for it can be reimbursed by the insurance company.
• Hotel or House Rental While Your Home Is Being Rebuilt or Repaired – This policy rarely comes in handy. If your house is destroyed or damaged, you may be required to accommodate yourself somewhere else, which would most likely be a hotel. The living expense of the nightly hotel stays and room service will be paid by the insurance company, but go easy on it as it does have a daily limit!
Hopefully, this insurance guide should serve you as a medium to better understand a homeowners insurance process.