Homeowners insurance is only a requirement if you’re financing your home through a bank or lender, yet having a comprehensive policy for your house and personal items can afford you peace of mind, especially if you live in an area prone to natural disasters.
Having a good homeowners insurance policy isn’t only for your home and belongings, however, as these products also feature a liability component that protects homeowners themselves against lawsuits from third parties injured on their property.
We’ve compiled some useful tips we learned in the course of our research to help narrow down your search for the best homeowners insurance coverage.
1. Update Your Home Valuation
If your home is undervalued, your homeowners insurance policy won’t cover 100% of the damages to it if the worst were to happen.
Similarly, if you’ve recently updated or renovated your house, your coverage amount should reflect those changes.
2. Do An Inventory Of Your Personal Items
Since your belongings are also protected by your homeowners insurance policy, it pays to have an updated inventory of valuable items such as computers, cameras, sports equipment, and anything of significant value.
3. Modify Your Coverage Based On Risk Factors In Your Area
If you live in an area prone to flooding, hurricanes, earthquakes, tornados, or wildfires, consider purchasing add-on or supplemental coverages that will provide full protection against these perils.
4. Know The Factors That Affect Your Rate
Many homeowners are unaware of the different factors that increase homeowners insurance rates.
Having a pool or trampoline, for example, will increase liability risks for your insurer, who will try to outweigh that risk by offering you a higher rate and monthly payment.
5. Know What’s Covered Under Your Policy
The best way to avoid surprises when it’s time to file a claim is by knowing everything that’s covered under your policy right from the start.
6. Compare At Least 3 Quotes Before Making A Decision
Before choosing an insurance company and opting for a policy, make sure to compare all your options to get the best possible deal.
More than half of borrowers don’t shop around before choosing a mortgage provider, and for many, homeowners insurance is just an unpleasant afterthought.
However, shopping around and becoming better informed about coverages and prices can help you get a better quote and save thousands of dollars in homeowners insurance over the life of your mortgage.
Something to keep in mind about homeowners insurance is that there are plenty of policy types out there, but they can be classified according to how much protection they offer in terms of replacing your home and valuables after a covered loss, the perils they protect against, and the type of property they are designed for.
For a more in-depth guide to finding the right type and level of coverage to safeguard your home and belongings against the unexpected, check out this guide on homeowners insurance.