Your home is without a shadow of a doubt the largest single investment you will ever make in your lifetime. Whether you have just purchased a new home or have made some home improvements, the chances are pretty good that you do not have enough homeowner’s insurance. In fact, a big 60% of American homeowners do not have enough insurance to re-build if they were to lose their home in a accident.
Most of us, when we buy coverage for our homes purchase the insurance based on the square footage of our house. This is a poor method to use because it does not take into consideration the valuables inside your home such as your HDTV, computer, valuable collections and so for. You should take a look at your current coverage and speak to your insurance company to inform them that you have valuables in your home and that you want to be sure you are adequately covered.
Standard homeowner’s insurance coverage includes hazard insurance and liability insurance. Hazard insurance covers loss of physical damage to your property and possessions. Liability insurance covers injuries to people who are on your property or for accidents caused by household members. Hazard insurance covers a lot of things such as fire, smoke, wind, hair, lightning, water damage and vandalism. It does not cover flooding. If you live in a flood-prone area you should definitely get some flood insurance. You should look for a policy that guarantees payment of 100% of your repair or rebuilding costs – without limits. Avoid policies that pay ‘actual cash value’ because this is inadequate coverage as it will never cover your repair costs.
Standard homeowner’s insurance provides around $100,000 in liability coverage which is not much when you consider hospital fees today. If someone becomes seriously injured while on your property and they decide to sue you, you could face losing your home and even bankruptcy if you do not have enough liability coverage. Avoid all this by ensuring that your liability coverage is between $500,000 and $1 million.
Do not become one of those homeowners whom becomes shocked to learn after major damage that their insurance policy does not cover them or that it does not pay for all or even a majority of their loss. Take the time necessary to review your homeowner’s insurance to make certain that it completely meets your needs. Doing otherwise is considered to be very risky and not advisable.