Homeowners Insurance 101: What You Should Know

by | Mar 26, 2013 | Insurance

Homeowners insurance in Huntsville AL is probably not something that you think about often, but getting the right amount of coverage is an important way to protect your valuable belongings in case of a disaster. Because it covers so many different things, it’s important to understand a few homeowners insurance basics in order to get the right coverage at an affordable price.

First, it’s important to know exactly what homeowners insurance covers. Your policy covers both the home itself (the physical structure), and all of your belongings inside (your furniture, electronics, etc.). If something happens to your home that renders it unusable and you are unable to live there, insurance will cover the cost to pay for shelter in the meantime-for example, staying in a hotel if your house suffers damage from a fire and you cannot live there. In addition, homeowners insurance in Huntsville AL should cover legal costs if you get sued for accidents that occur in the home.

In order to shop for the right amount of homeowners insurance, it’s important to know the value of your home, and an approximate value of your belongings inside. While you do not need to have a line-item inventory of everything in your home, it is a good idea to have an idea of what your largest and/or most valuable items are, along with an approximate “replacement cost” for each item. Double-check your policy to ensure that it covers the “replacement value” (rather than “fair market” or “cash” value, which will take into account depreciation and wear and tear on items and pay out less to replace them) of the home and all contents inside.

In addition to knowing what is most valuable in your home, you should have documentation of all these items. The best way to document is with video or photos, along with purchase receipts (especially for large items like furniture). Keep all of this information in a safe place where it can be easily accessed in case of an emergency, and will not be destroyed-for example, do not keep the inventory list in a box in your storage room where it could be destroyed in a disaster such as a flood or fire.

Finally, read your policy and ask questions about what is not covered. Often a basic policy for homeowners insurance in Huntsville AL will not cover things deemed to be “Acts of God”, which can include earthquakes or floods. These natural disasters often require additional policy coverage.

Understanding the basics of homeowners insurance can help you find the right coverage to protect your belongings, your home, and your family from disaster.

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