A home insurance policy can be intimidating, especially if you don’t understand what’s written on all that paper. Following are several tips to better familiarize you with this essential product:
Know the Steps:
Your home insurance policy will likely list the steps you need to take following a loss in order for your claim to be processed correctly. Examples of these steps may include:
- Taking measures to protect the property against further loss, such as moving personal property to a temporary storage location;
- Calling the police
- Taking no action that will inhibit the property from repair.
Review the steps listed in your policy and add them to your home-safety plan.
How Does Your Home Insurance Policy Pay?
You need to know how your home insurance policy will pay for a covered loss. The most common types of payment are: Actual Cash Value (ACV) or Replacement Cost. The former will pay cost to repair or replace damaged property at the replacement value of the property minus depreciation. The latter will do the same but without a deduction for depreciation.
As the policyholder, you may be able to choose one or the other for different types of property. For example, it is not uncommon for a policy to offer Replacement Cost coverage on the home itself and ACV on personal property. Fluctuations in value for property are frequent—you should review your policy’s limits at least annually to ensure that the limits are still adequate. Failure to do so could result in a costly penalty for under insurance.
Know Where Your Policy Will Go
You and your personal property are not always at home. When reviewing your home insurance policy it is important to know to what extent it covers. For example, you may have “any where in the world” coverage for personal property while property considered part of your building, such as a lawnmower, may be covered only on your premises.
Invest in a Home Insurance Agent
Knowing what to do after a loss, how your policy will pay and where your coverage applies are only parts of the process – and none of these steps matter if the loss is not covered.
Understanding the types of losses that are covered by your home insurance may be the most important and confusing part of the policy. Most people struggle with understanding their policies. And worse, many people do not know which questions to ask to gain an understanding.
Investing in a home insurance agent is the best way to educate yourself about home insurance. A good home insurance agent will illuminate your situation and discuss scenarios that will help you decide which coverage to buy. Simply knowing someone is looking out for you and your biggest investment can help you sleep better.
Discover how easy shopping can be. Get your free home insurance quote now.
