Are you a regular or smart homeowner? Regular homeowners have insurance, but they probably don’t understand what type of coverage they have, and what to do when it’s time to file a claim.
A smart homeowner, on the other hand, knows exactly what coverages are included in their homeowner’s insurance policy. Even the insurance industry can be confusing, they take the time to understand what policies they have in place to protect their most important assets and personal belongings.
Not all home policies are the same. There are different types of homeowners insurance coverages and policies are available, and it pays to know what you have and what you might need.
Want to learn about the most common options? Read on below to find out now.
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Standard Homeowners Insurance
Standard homeowners insurance plans are something that every American homeowner needs to have in place. If you have a mortgage on your home then it’s required.
Most policies will cover the basics. If a tree falls on your home, you’re covered. If your home burns down, you’re covered. If someone is injured on your property, then that incident would be covered.
But every homeowner’s insurance plan works a little differently.
Some policies cover the actual cash value of your home. This includes the cost of the house, as well as all your stuff, after factoring in depreciation.
Some policies cover replacement costs, which means you’re covered the amount it cost to totally replace your home and belongings.
Then there are guaranteed replacement cost policies. These cover the full amount of your current home, and then some, to ensure you receive enough to rebuild your home in today’s market. This is the best homeowners insurance policy to have, though it comes at the cost of higher premiums.
Earthquake Insurance
Most states, including some in the Midwest and along the East Coast are susceptible to earthquakes. Most homeowners insurance policies don’t come with earthquake coverage.
If you’re in an earthquake-prone zone, you should add an addendum or a separate earthquake policy.
Flood Insurance
Flood insurance is one of the most important policies for homeowners, but it’s one of the most overlooked. Most standard home insurance policies don’t provide coverage for damage from floods that originates outside the home.
Your current policy may cover flooding that occurs inside the home, from a pipe burst, for example.
But if you live in a flood zone, you need to have flood insurance, especially if you are within a few miles of a coast. Hurricanes and flooding happen every year. Rising water levels can cause serious damage to the lower level of your home, making it unlivable.
The best flood insurance will not only cover the cost of remediation and repairs, but it will also cover the cost of staying at a hotel while your home is refreshed.
Click here for more information on flood zones and upcoming changes that will affect rates.
Understanding The Different Types Of Homeowners Insurance
The best insurance agency will let you know what all of your options are when comparing different types of homeowners insurance policies are. It pays to take your time when choosing a provider and a plan.
If an incident ever occurs, you’ll be extremely glad you choose a better plan, rather than the cheapest plan.
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