You’ve purchased your first home. Now you just need homeowners insurance. But what exactly is homeowners insurance, and what does it cover? Like many insurance policies, it can be a little mysterious to an outsider. Here’s what you need to know as you start shopping for policies.
1. What exactly is homeowners insurance?
Homeowners insurance protects your home and the items inside of it, from things like damage and theft. Fire, vandalism, gas explosions, hail, and lightning damage are usually covered under a homeowners insurance policy. However, earthquakes, floods, and intentional damage usually aren’t covered. Often you need a separate insurance policy for earthquakes and floods.
2. Why aren’t earthquakes and floods covered by homeowners insurance?
Generally, it’s because earthquakes and floods have a higher risk in specific areas. You may be in an area that doesn’t flood at all, ever: consequently, flood insurance would be wasted on you. You may also be in an area that is extremely prone to earthquakes.
3. Do you need to have homeowners insurance?
Technically, no. No one is required to have homeowners insurance by law. But most people who have a mortgage will be required to have homeowners insurance by their mortgage company: after all, they want to protect their investment. And, even if you own your home outright, having homeowners insurance is a good idea. Like most insurance, it’s never dire until you do need it.
4. How much does a homeowners insurance policy cover?
When you get a homeowners insurance policy, there will be coverage limits set. These coverage limits will control how much you’ll get in the event that your home is damaged (or even destroyed). This will also control your homeowners insurance premiums.
5. Why are my insurance premiums so high?
Premiums can be high for a number of reasons. If you’ve never had homeowners insurance before, you may have an initially high rate. If you live in an area that often has weather-related issues (such as in the heart of Tornado Alley), your insurance rates will be higher. You can lower the rate of your insurance premiums by increasing your deductible, bundling other types of insurance, or just shopping around.
6. How much coverage do I need for my home?
Generally, you should cover the replacement value of all your items, as well as how much it would cost to replace your home. Keep in mind that replacing your home (building a home from scratch) is going to be more expensive than your home’s current market value. You don’t have to cover everything, but it’s prudent.
7. What if I have a non-traditional home?
Some people don’t live in a house. Instead, they live in a boat or an RV. If that’s the case, you’ll need special insurance, such as RV insurance. There are insurance policies that are specifically designed for people who are living their life on the road or the open seas.
Are you ready to explore your insurance options? Contact the experts at Transparity Insurance Services.
About Transparity Insurance Services
Transparity Insurance Services was founded for the purpose of helping clients to ensure their property and assets with no hassle. We are committed to providing a simple, easy, efficient, and positive experience to all of our clients, and prioritize open and transparent communication with our clients. Through our excellent customer service and technology, we can help you to find the right insurance program at a competitive price. Contact us today at (855) 889-2037 to learn more about what we can do for you.