What to look for in homeowners insurance?

26th Oct 2009 by Carrin

When looking into homeowners insurance, keep the following in mind:

1) Standard policies will provide coverage for damage to your home and any permanent structures
2) Make sure that your policy has adequate limits, which means that your home will be covered according to its present worth, not necessarily the purchase price
3) Be aware of the “named perils”, or causes of damage to your home and make sure that they include common causes for damage in your geography (for example, if you live in Florida, be sure that you have hurricane coverage)
4) If you own expensive items, such as jewelry or electronics, be sure that they are included in your policy, which will most likely include some limited coverage (usually between $500-$2000)
5) Be sure that your policy includes “personal liability”, which will cover you in the instance that someone is injured on your property
6) In the event that your property is damaged, make sure that your policy includes coverage for temporary housing

Some things that should be included in your policy:

1) Endorsements, or formal amendments to your policy for specific high-priced items. You will need to provide documents and appraisals of the items to the insurance company
2) Guaranteed Replacement Value, which means that, if there is a disaster, your home will be rebuilt, despite the cost

Another quick tip when dealing with your homeowners insurance policy:

1) Document your home. The best way to do this is to photograph and/or videotape your home and possessions, then store these in a safety deposit box or fireproof safe

This answer is the subjective opinion of the writer and not of FinancialAdvisory.com