Buying a home is a huge investment. Not only is it a huge financial investment, but you’re also investing time and care in your home. Because a home is such a precious asset, it’s important to have protections in place in case something happens to your home. That’s what homeowner’s insurance is for. When you insure your home, you are making sure that even if something bad does happen to your home, you’ll be able to rebuild it, as good as new. But finding the right policy for your home can be a tricky process; you really need to understand homeowner’s insurance if you want to pick the right policy.
Be sure to have the value of your home thoroughly evaluated. You can hire a general contractor to come in and estimate the value of your home for the purpose of providing an estimate to your homeowner’s insurance broker. By doing this, you are getting an independent opinion of the value of your home, and are making sure that the repairs to your home will be covered to the last penny. You may be tempted to quote a lower value in order to save on the monthly premium, but resist that temptation. If something happens to your home, you want to make sure that the repairs or rebuilding costs are completely covered.
Traditional homeowner’s insurance covers most major perils, such as fires and storms. But it does not usually include earthquake, flood, war, or nuclear accident. If you like in a particularly high-risk area for any of these additional perils, such as earthquakes, which are common in California, or floods, which are common in areas along rivers, then you may want to take out additional insurance against the event of an earthquake or flood. These events can be devastating. Make sure that you’re covered.
When you set the value of your homeowner’s insurance policy, it’s usually set for a few years. But if your policy is more than a few years old, the prices for labor and materials may go up significantly. If this were to happen, then your insurance policy would not be enough to cover the repair of damage to your home at current rates. You can also add inflation protection to your account to make sure that any necessary repairs are paid for, even if they cost more than you originally estimated that it would. It’s a good way to keep yourself covered.