Buying a home is likely the biggest purchase you’ll ever make. It’s important to protect this investment. This is where homeowners insurance comes in. Homeowners insurance provides you with broad coverage for losses that can arise while owning or renting out your home – like damage to your personal property, theft and vandalism, and liability coverage for accidental injury to another person or property. Accidents do happen and you want to be sure you’re protected if someone is injured on your property.
In the aftermath of disaster, whether from fire, tornado, theft, or liability lawsuits, repairs and replacement costs add up fast. The majority of homeowners would be unable to come up with the cash needed to return everything back to normal. Each year you pay a premium. The amount is based on numerous factors, including the value and location of your home.
Be sure to ask your insurance provider for the specifics of what your policy covers. You want a policy that gives you the right amount of coverage. Typically, floods and earthquakes are excluded from basic policies, but you may be able to get supplemental insurance policies for those situations. A few other conditions most companies specifically exclude are mold, fungus, wet rot, dry rot and bacteria.
In the event of a claim you will need to pay a “deductible.” This amount ranges from a few hundred to several thousand dollars. For example, should you have a fire, and the damage total is $10,000, you only pay the “deductible,” say $500 to $1,000. This is much more manageable for most homeowners.
To cover not only your property losses in a fire, but also your possessions, you will need to have proof of what you had. Homeowners should create an itemized list, updated yearly, that gives evidence of what possessions they have and how much they’re worth.
Make sure your policy has replacement cost coverage, not just the present value. If you lose a mattress in the fire, it will cost you $1,000 to replace, not the $50 it might be worth now. In order to have proof of your possessions, consider making a video or photo diary.
Vacation rentals are big business in Big Bear and if you’re planning on renting your home you need to have the right insurance coverage. Vacation rental insurance usually falls under the “surplus lines” category. The companies that specialize in this type of insurance are Lloyd’s of London, AIG, Lexington, and Allied Insurance. If your current insurer can’t cover your rental property, ask them for a surplus lines referral.
If you have a mortgage on your home, you may be required to carry Homeowners Insurance. The reasoning behind this logic is simple. You are not the “owner” of your home until you have completed your loan obligations.
Until that point, the bank or lender has a lien against and part of the loan terms require insurance. They want to be sure their investment is protected. For those who own their home outright, homeowners insurance is not required by law, but it would be a crime not to carry it.
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