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Do You Need Homeowners Insurance?

By Compuquotes Team on March 27th, 2008
Homeowners Insurance

If you own your home then chances are high that you have received some sort of advertisement offering you homeowners insurance. Before you start looking for the cheapest company find out what homeowners insurance is all about and become familiar with the different types of options and policies that are available.

Standard homeowners insurance policies will offer you financial coverage of the structural part of your home, as well as the property within the home. You can also purchase additional liability for your family, including pets. Common problems that arise and cause loss to homeowners include theft, natural disasters, just to name a few. There are many things that are covered in your homeowners insurance policy but flood and earthquake are two that will require additional coverage.

How much you will pay for your premium will be determined by your home's structure, the personal property you own, as well as the amount of liability you choose to use as protection in the event of an accident. It is important to make sure to get enough insurance to cover the cost to rebuild your home in today's high market prices if a natural disaster were to take place. Do not include the cost of the land and don't base the amount to rebuild on the price you paid for your home because the cost of rebuilding is constantly changing.

It may seem crazy but many insurance policies will only offer coverage of about 50 to 70 percent based on your current homeowners insurance policy. You are the key player when it comes to making sure all of your property is correctly written down in an inventory listing that includes all of your personal possessions. It is important to make this inventory list as detailed as possible including the price you paid, the condition, and any pictures or receipts you may have are all great to have in the event of a loss.

If you own special antique furniture or expensive jewelry and furs then you should consider getting additional coverage with an endorsement or floater policy. It is common for insurance companies to only compensate you about $1,000 for any jewelry or furs that are burned in a fire or stolen, so if you have items more valuable then that then you should definitely purchase additional coverage to protect yourself.

The most beneficial and expensive parts of your homeowners insurance policy is the liability portion which offers you and your family protection against lawsuits for bodily injury or property damage. This also includes damage caused by pets such as a ruined couch or a bite. This portion of your homeowners insurance policy also pays for the cost of defending you in court as well as any damages the court rules you to pay. It is common for many companies to offer a starting level of protection at about $100,000 but it is wise to go with more.

The additional costs portion will cover any additional costs that you will face if you are forced to live outside of your home temporarily due to fire or some other disaster.

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