A Guide to Determining What Kind of Home or Rental Insurance You Need
If you're shopping for homeowners or renters insurance, you'll want to avoid two common mistakes that most people make: buying too little insurance and paying too much for it.
Insurance experts say that a homeowners insurance policy should cover the total cost of rebuilding, repairing, or replacing your house property, and personal possessions, in the event of burglary, a fire, a hurricane, or other disaster (note that in most policies, coverage for floods and earthquakes is not included). It should also cover liability for any injuries or damage that you, your family, or your pets may cause to other people, as well as living expenses in case you must move out of your home while repairs are being made. Renters insurance, according to experts, should protect your possessions and should include liability and living expenses. The policy should also protect you - at least in part - if your insured possessions are damaged or stolen "off premises," for example, while you're traveling.
Experts suggest that before you contact an insurer, you'll need to take an inventory of your valuables, then calculate what it would cost to replace the ones that you'd really need or want. Look for a policy that guarantees the replacement value - not the cash value - of your belongings. Also be aware that according to the insurance information institute, the amount of coverage on your belongings in a standard homeowners policy is 50 to 70 percent of the amount you have on your home. If you need more coverage, you will need to negotiate for that. Finally, check to see whether coverage of jewelry or other specific items is limited. If you want to insure art or jewelry above that limit, you will have to get an appraisal to verify its value and pay for additional coverage.
Now, about not paying too much for your insurance: Hundreds if not thousands of companies provide homeowners and renters insurance, and prices vary substantially from company to company. The best way to find a good policy, according to experts, is to ask friends if they have made a claim with their company and were happy with the results. Then you can compare premium prices of those companies. Also, check with your state insurance department to see if it publishes a guide that shows what insurers charge for policies in different parts of your state.
Taking the time to get the right insurance today is an important part of protecting your tomorrows.
Tags: Home Insurance , Rental Insurance
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