For most people, their house is their biggest investment, and once it’s paid off it can become their biggest asset. As such it needs to be properly protected.
It’s not nice to think about what might happen if someone broke in and stole your possessions, if a fire occurred, or if someone slipped on your sidewalk and sued you. But you can protect yourself against these losses and more with a good homeowners’ policy.
Standard homes, rental properties, seasonal-use properties and condo properties should all be covered against appropriate potential losses. For example, your third-floor condo may not need sewer backup protection but you might need to obtain coverage to use a barbeque on the balcony. Your cottage at the lake might be both seasonal and rental, and you’ll need to have coverage for a winter burglary and for damage caused by a tenant.
Inadequate coverage can make a bad situation worse, but the right coverage can make it as painless as possible to adjust through difficult circumstances.
Just like an auto policy offering liability, collision, comprehensive and glass, there are several different components to a home insurance package as well.
Building coverage protects the house or building if it is damaged due to perils such as fire, hail, tornado etc.
In the event of damage to your house or total loss, the cost of repairs or rebuilding will be covered by the right policy. This is where a “comprehensive” or “all-risk” policy is handy, especially one that includes a replacement cost clause in the contract. Most home policies are this type.
Your dwelling building coverage should increase a little bit every year to account for inflation costs in materials and construction costs. In other words, if you bought your policy in 2005 and haven’t adjusted your replacement (rebuild) value since then, call us to make sure that the coverage for repairs or rebuilding is in line with current costs.
Personal property coverage looks after the contents of the building.
This protects the contents of your home against events such as fire or theft. Personal property is everything not attached to the dwelling, and includes appliances, clothing, furniture and so on. In a standard policy some classes of property may be excluded or limited, such as jewelry or cash. If you’re the type who likes to keep their fortune in cash or in a strong box in the house, you can obtain additional coverage for these items.
This is a good time to mention that a fireproof strongbox is an inexpensive way to protect personal property such as deeds, mortgage documents, and of course cash and jewelry.
Liability coverage pays for legal defense costs and settlements.
Like it or not, we live in a society where it’s easy to sue for all manner of things. You should have at least $1,000,000 personal liability coverage to protect you from potential lawsuits and wage garnishments arising from personal liability claims. These could be anything from dog bites to slip and fall claims. If a guest or neighbor is injured by your negligence, they can file a claim against your coverage.
With the right coverage in place, you can be spared what could turn out to be years of legal and personal headaches.
Living expenses coverage looks after the cost of temporary accommodation such as hotels if you are forced out of your house due to damage (such as fire, hail, tornado etc).
If you’re forced from your home due to a damage covered by your policy and need temporary accommodation such as a hotel while your property is being repaired, your policy will cover these necessary and reasonable living expenses.
If you already have home coverage, make sure you aren’t paying too much by following these tips.