Tuesday, 14 May 2013

How To Insure Your Home

                              Homeowners insurance protects your home, its contents in the event of theft, accidents, fires or other disasters. As I already mentioned about a standard homeowners policy that is
known as HO-3 policy, which will protect you from things like fires, theft and accidents. But have you noticed I didn't mention earthquakes, floods or war - because those events are specifically not covered by a standard policy and require additional coverage.

             If someone is on your property and hurts him/her self by falling down , so he/she might sue you for his medical treatment. If your home is properly insured in these kind of situations, the insurance company covers your liabilities. However, homeowners insurance is not required by law, like its necessary in auto insurance. But mortgage companies usually require you to have a home insurance policy before they will pass your loan.    
                        But a standard policy is not like a blank check, there is a limit to what amount you will be compensated. Remember one thing, when it comes to protecting your possessions you may want more coverage than your standard policy allows. So if you have anything of exceptional high value item like art, jewelry or family heirloom etc, then you should insure it separately. I know insurance company will charge some extra for this coverage but it pays to be covered.

                                     It is the most important thing to understand about the type of company you are going to work with, and the variety of plans available in market. 

1) Find Out Types Of Insurance Companies Present -
                                There are different kinds of homeowners insurance sales people and companies out of which few are explained below :

      a) Direct Sellers - this category includes those, who sell directly to consumers, typically online or over phone for example USAA or Progressive. 
      b) Captive Agents - this category includes those, who only sell one company's insurance products for example State Farm.
      c) Independent insurance agents - this category includes those, who sell policies from many different companies. Using an independent agent can help you get many quotes from several companies at once, but it's important checking out quotations from all three types of insurance companies because commissions, terms and packages will differ.

                    It may happen that all of these groups will dismiss your insurance application for any reason like the tornado or from the risky pool of alligators that runs through your property every year. Don't just give up hope, many states have state-sponsored insurance programs for the hard-to-insure. Then what you need to do is search for your state's Fair Access to Insurance Requirements plan if you are having difficult time with the normal insurers. 

2) Compare Quotations - If you got several insurance policies with the same company see what your plan would cost and how much you are getting off. Also, keep this thing in your mind that premiums will mainly includes a commission of 10 to 15% if you are dealing with an insurance agent, so make sure the plan pays enough value for your money.

3) Which Plan To Choose? - Always go for a replacement cost plan, instead of actual cash value. A replacement cost plan covers the amount, it would take you to rebuild or repair your house with similar materials, and not taking into count how much your home may have depreciated by time or wear and tear. This is separate from the market value of your home.

                                        There are many common incidents that can cause real damage to your home, but are usually excluded from your insurance policy.

      1) know the basics :- 
                                Usually standard plans cover the costs of rebuilding or repairing the home and other structures, like shed or garage. These plans also covers medical expenses and protect against lawsuits or claims resulting from accidents on your property or caused by pets or residents.

       2) know the exceptions :-
                                Most of the standard insurance policies do not cover flooding, intentional damage, damage from insects and animals to the property. And in some states, you may also have to pay more to cover your property from earthquakes or windstorms.

      3) beware of "guarantees" :- 
                                Some insurance companies will offer select customers, guaranteed replacement cost plans, that means they will cover the costs of rebuilding your home even if it exceeds your policy amount. However, those types of plans cost more than standard plans and are sometime capped at 125% of the insurance amount, meaning they will only pay 25% beyond the amount of your current insurance policy. 

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