Your home is most likely the most expensive possession that you have. This makes it essential to insure it so that you can be sure to have it covered, along with your personal possessions inside. Buying a good house insurance policy means that you need to be an informed buyer. Here are some details.
Two Types of Coverage
A house insurance policy will either give you coverage for the actual value, or for the replacement value. Actual value includes depreciation, which means that an older house may only get 50% (or less) of the current value. This type of house insurance policy could leave you without a house because there may not be enough cash to rebuild.
Replacement value, on the other hand, will give you a house of equal value - in modern materials. This is the more expensive of the two types of policies.
Coverage for Events
House insurance policies carefully state what they will cover. You need to know that if it is not listed in your policy, then you are not covered for it. Most policies will cover you for natural events like fire, tornado, lightning, hail, and a few others. You can be sure that you are not covered for flood damage or earthquakes - these will need to be purchased separately.
There are other things that can bring a lot of damage to your home, too, and you will need to find out if it is covered. This could include things like vehicle damage, snow, plumbing problems, smoke, falling objects (think trees) and more.
Liability
You never know when someone could fall on your property. Of course, this could result in a lawsuit. You need to be covered - just in case.
Contents of Your Home
You have a lot of personal property in your home that you will need to have covered, too. A house insurance policy, however, will only pay for items that are listed - and only about 50% of the value. Special items of greater value (art, jewelry, collections, etc.) will require special coverage. One of the best ways to show your personal property value is to make a walk-through video showing your possessions and talking about them and their value.
Things Not Covered
As you shop around for a house insurance policy, you need to know what things are not covered. You do not want to assume, for instance, that your home business equipment is covered. While it may cover a couple thousand dollars worth, you will need to know for sure.
A sewage backup will also probably not be covered, nor will large boats or car parts. Hail damage is another thing that your house insurance policy probably will not cover, either.
Living Expenses
If there should be a fire or some other reason that you cannot live in your home, this part of your house insurance will provide you with a hotel and food while it is being rebuilt. You also can receive rent money if you had a renter living there as well.
Original source: http://ahouseinsurance.wordpress.com/?p=8
