Homeowners insurance used to be referred to as “hazard insurance”, but these days most people understand that “home insurance” is used to protect your home and your personal possessions. Having the right coverage allows you to have peace of mind knowing that your home and possessions are covered for not only yourself but your family as well.
However, there can be much more to your homeowner’s policy than meets the eye. Besides protecting your home and belongings, here are some other reasons you should invest in coverage for your home.
- Satisfying your mortgage lender – in order to be allowed to get a mortgage from your bank, most mortgage lenders demand that you have insurance if you are still paying off the mortgage. This not only protects their investment but yours as well.
- Providing Property Coverage – This means should your home or property contained within the structure happen to be damaged or destroyed, you will get money from the insurance company to repair or replace any damages or lost property.
- Providing Liability Coverage – Should someone not covered under the purchased policy be injured or worse, or they have property damaged or destroyed while on the premises, your insurance company will cover any personal legal responsibility attached to you. This goes beyond your property in rare cases such as a tree branch falls on somebodies parked car outside of your residence.
Why Your Mortgage Company Requires Homeowner’s Insurance?
If you currently have or are in the process of acquiring a mortgage it’s very likely that you were required to purchase home insurance. The cost is most likely included in your monthly mortgage payment along with the property taxes. In some cases, should you not purchase homeowner’s insurance on your own, your mortgage lenders could put insurance on the home and property by force, often at an extreme cost to you.
Homeowner’s insurance is not only to protect yourself and your possessions, but it is also to protect your mortgage lenders investment. This gives them protection should something like a man-made or natural disaster damage or destroy the property before they get a chance to collect their money through premium payments.
The Primary Coverage Issues With Homeowner’s Insurance
- Dwelling – this part of your policy insures for any damage or destruction that affects the home itself. Some of the covered hazards include fire, smoke, lightning strikes, windstorms, hail, explosion, vandalism, damage caused by ice or snow, etc. It’s important to think about the types of damage that are reasonably possible for the area you live in.
- Other structures – other structure coverage is included to cover any other structures located on your property that is not physically attached to the house such as a detached garage or shed.
- Personal Liability – this is designed to protect you should someone file a claim against you due to injury or property damage claimed by other individuals. This form of coverage extends to outside the covered property to virtually anywhere worldwide.
- Personal Property – this part of your coverage policy is designed to replace any possessions within the home or other structures such as clothing, jewelry, furniture, etc.
- Additional Living Expenses – this coverage is designed to provide you with any additional costs that come into play generally after a covered incident. This includes hotel bills should you have to stay somewhere while your home is under repairs.
Items That Your Homeowner’s Insurance Don’t Typically Cover (But Could)
Depending on where you live, there are certain events that occur so frequently that they are generally excluded from your basic homeowner’s coverage package. These perils include but are not limited to:
- General wear and tear
- Damage from pollution
- Intentional damage to the structure
- Any damage from pets, rodents, insects, and birds
- Flooding or sewage backups
- Land movements such as earthquakes, mudflows, and landslides
How Your Insurance Company Determines Your Policy
There are many different factors that attribute to the process of determining your insurance premium. Prices vary depending on what you need, and what company your insurance policy is going through. You can determine how much you are willing to pay depending on what level of coverage you purchase. A few of the factors that will attribute to your insurance premium are:
- Total home reconstruction cost: this cost is always lower than your original purchase cost as the price of your land is not included.
- Your home’s distance to services and resources: this generally includes things such as your local fire department distance and overall quality, as well as your nearest water source.
- Wood or Brick: insurance premiums are generally quite lower for homes constructed mostly out of masonry or bricks rather than wood frame homes.
- Condition and Age of the Property: Your premium will quite often be higher on homes in poor shape and older homes as opposed too newer homes and homes in good condition.
- Neighborhood claim history: premiums are generally higher in communities with a higher claim rate mainly including houses directly next to yours.
- Pets: should you own pet breeds that are known to be more aggressive some insurance agencies may even refuse to insure you.
- Higher risk outdoor amenities: this includes such things as swimming pools, trampolines, and certain playground equipment.
Since 2003, we’ve been helping homeowners all around the Gwinnett County find peace of mind with their home insurance. We have happy customers all around Lawrenceville, Buford, Suwanee, Johns Creek, and Duluth. Call us and let’s talk about your needs. We’ll help you determine the right kind of home insurance for your needs. Let’s get you covered.
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