Homeowners Insurance Facts
Your home is probably the biggest investment you’ll ever make. And your homeowners insurance is your defense against risks that might affect your home. So you have a home or plan on buying one, you need to purchase homeowners insurance as soon as possible.
A basic policy covers damages from incidents such as theft, vandalism, and fire. It will also repair or replace personal property. Injuries that occur to guests in the home are covered as well. Some incidents are not covered by this type of policy. Damage caused by a flood or earthquake is not covered. You’ll need separate policies for those incidents.
Understanding Property and Dwelling
The difference between dwelling protection and property protection confuses some homeowners. The structure of your home is protected if you have dwelling coverage. For your personal possessions, you need property protection. And if you have multiple buildings on your property, such as a storage shed or pool house, you might need separate policies.
Cash Value or Replacement Cost?
You’ll have to decide if you want cash value or replacement cost coverage. Cash value pays the current value of your home and belongings. If the local real estate market has dropped, then your benefit will reflect that change. Most homeowners choose replacement cost because you’ll receive enough financial assistance to make repairs or replace your belongings.