Every new homeowner should invest in a beginner’s guide to homeowner insurance to fully understand the steps they need to take. While homeowners insurance is usually not the top priority in a budget, it should be one of them. People sometimes make the mistake of viewing home insurance as a luxury. However, it is a necessity and even required by mortgage companies to protect their investment. Here are some reasons why homeowners insurance is essential in your overall financial plan.
Homeowners Insurance For Beginners
Homeowners’ policies are highly customizable, but most plans share the following essential elements.
Interior and Exterior Home Damage
In case of fire, lightning, high winds, hail, vandalism, or other covered natural disasters, your homeowner’s policy will cover the repair and rebuilding of your home. You will receive compensation for lost contents of the house, such as appliances, furniture, clothing, and other belongings. Some things that are generally not covered include damage from earthquakes, floods, and lack of general maintenance. Exterior freestanding structures may also need additional coverage.
Personal Liability
If someone gets hurt on your property, you may be liable to pay for their medical expenses. The same goes for damages inflicted on others by a household member, including pets. Having this coverage protects you against a lawsuit due to an alleged injury on your property.
Housing During Repairs or Reconstruction
This coverage is beneficial if you find yourself displaced from your house. The additional living expenses coverage reimburses rental, meals, and other expenses incurred while construction takes place on your home.
What Are the Types of Coverage?
When you save money on insurance, you are likely getting less coverage in return. There are three types of coverage that you can choose for your home insurance.
Replacement Cost
These policies offer the total cash value of your house and its contents without subtracting for depreciation, allowing you to rebuild or repair the original home value.
Actual Value
Actual value takes depreciation into account and provides you with the current worth of your home and items instead of how much you originally paid for them.
Guaranteed Replacement Cost
It is the most comprehensive policy and offers the best protection against inflation. Guaranteed replacement cost policies pay for repair or rebuild costs, even if it exceeds your policy limits. Most advisors say this is the best policy to get, but it is also the most expensive.
Many aspects go into searching for a homeowner’s insurance policy. You should shop around to compare rates and policies, then evaluate your options in context with your financial situation, family needs, and long-term goals to find the policy that best meets your requirements.
About Haughn & Associates
Founded by Michael Haughn in 1986, Haughn & Associates is a full-service, family-owned, independent insurance agency based out of Dublin, Ohio. H&A strives to provide the best possible price and unique insurance solutions across a myriad of industries, including construction, IT, Habitation & Commercial Property, Agriculture, and Engineering. Devoted to providing the best of business insurance, life and disability insurance, personal insurance, employee benefits, and bonds, H&A is proof that success lies in long-standing client relations and satisfaction. To learn more about how H&A can be of service to you, contact us at (877) 802-2278.
