Life is unpredictable. The evening news is proof of that. There are fires, floods, earthquakes, and hurricanes, and that’s on a slow day. Home insurance helps people protect their largest, most substantial investment. In this article, we will discuss the most important things to consider when shopping for home insurance and how much is home insurance?
How much is home insurance depends on various factors
While plans invariably vary from insurer to insurer, most of them have four main components:
- How much is home insurance a year
As you might imagine how much is home insurance a year? This is the single most important aspect of any standard home insurance policy. It protects the home against damage from storms, fires, and other natural disasters. At the very least, you should insure your home for one hundred percent of its value. This is the amount it would cost for the home to be completely rebuilt. This might seem like overkill. After all, homes are seldom completely destroyed when they are damaged. Still, it is better to be safe than sorry.
- Coverage for Contents
Most standard policies will cover the cost of your personal belongs if they are damaged in a natural disaster. They may also pay if your personal effects are lost or stolen. The average coverage for how much is home insurance per month contents is equal to fifty percent of the value of your home. So, if your home is worth four hundred thousand dollars and it burns to the ground, the insurance company will pay you two hundred thousand dollars just for how much is home insurance per month contents.
- Liability Protection
Most people are unaware of the fact that home insurance also covers damage to other people’s property and how much is home insurance a month. For example, if you daughter accidentally throws a football through your neighbor’s expensive bay window, your insurance provider will probably pay for it. This is called liability protection and it generally covers damage to property, medical expenses for injuries, and court costs. Most insurance providers recommend at least $100,000 of liability insurance for a comprehensive policy.
- Reimbursement for Additional Living Expenses
This aspect of the insurance policy only comes into play if your home is damaged and how much is home insurance a month. If the policy holder is forced to find a pied-a-terre, his insurance company will pay for his living expenses while his home is being repaired or rebuilt. This coverage generally includes the cost of rent or hotel bills, food, and even rental car fees. The standard policy provides additional living expenses that are equal to around twenty percent of the value of coverage on the home. So, if you have four hundred thousand dollars of coverage, your family will receive around eighty thousand dollars for living expenses.
Assess Your Coverage Level
If a natural disaster destroyed or extensively damaged your home, would you have enough insurance to cover the losses or how much is home insurance? The U.S. Government Accountability Office reports that most residential homes are underinsured by an average of 22%. If you fail to assess your home insurance coverage before disaster strikes, you may be left out in the cold.
Identify Coverage Gaps
Are you covered for “cash value” (the item’s depreciated value) or “replacement cost” (cost of the item brand-new)? Do you have luxury items such as jewelry that are valuable enough to require riders? Identifying the gaps in your home insurance policy can help prevent unfortunate surprises when filing a claim.
Take a Home Inventory
If you had to file a claim, would you be able to prove the value of your lost, stolen or destroyed items? According to the Insurance Resource Council, less than half of homeowners keep a proper home inventory. Keeping a list of your home’s valuable items can help you recall the value of your items when filing a claim. Collecting original sales receipts, serial numbers of big ticket purchases and photographs/video of the items is recommended when taking a home inventory.
Understand Flood Insurance
Despite the fact that 11 million homes lay within flood zones; over 65% of homeowners do not have flood insurance or know about how much is home insurance. Flood damage is not covered by a standard home insurance policy, and must be purchased separately. If a hurricane or other natural disaster causes a flood, the resulting damage to your home will not be covered by a standard home insurance policy.
Cut Home Insurance Costs
Why pay a fortune for insurance when you could get the same coverage for less? Increasing your deductible from $250 to $1,000 could cut your premium by up to 30%. Installing a home security system may save as much as 20% on your rate.