Having a new home is overwhelming, but as part of it, you should consider that it is important to protect your property. Home insurance is not mandatory but whether it is mandatory or not I believe that it is a good choice to have a Home Insurance. Let us define what is home insurance first in order for us to have a better understanding of it. Home Insurance is an insurance that secures or protects your home and personal possessions from fire, theft, mischief and other danger or hazards. What should we consider then, before buying a homeowner insurance? First in buying a Homes Insurance you have to figure out how much and what kind of coverage’s you will need to secure your property. You should have knowledge or must obtain information regarding the various companies fee, different rates and different coverage.
Basically there are three types of coverage.
- Actual cash value – This value covers the house plus the value of your belongings after deducting loss of value. For Example: how much is your stuff worth, not how much you compensated for them.
- Replacement cost – This is the actual cash value without the deduction for loss of value, so you can make repairs or reconstruct your home up to the original value.
- Guaranteed (or extended) replacement cost – The most complete. It pays for whatever it costs to repair or build your home – even if it exceed your policy limit! For sure insurers offer prolonged replacement, meaning it offers additional amount coverage than your purchased. But there is a limit; frequently, it is 20-25% higher than the maximum.
Once you have gather all the information needed. The next thing you should know is where to buy a Home Insurance. Before making a decision, you have to make sure that you only purchase a home insurance form an authorized company or license agent, in order to avoid problems that might arise in the future.