You’ll have to make countless decisions as a new homeowner. Where to put the TV, whether that spare room should be a home office or a home gym are all important ones. But one that is even more important is the decision to get homeowners insurance.
Foregoing homeowners insurance can be detrimental should unforeseen circumstances, like theft or fire, leave you without your valuable or essential items. In situations like these, your insurance plan may provide you with compensation for the items you lost so that you won’t be financially harmed by the issue.
What to consider
There are many options out there, and it’s important that you choose the one that works best for you. David Pitt, a personal finance writer, noted some basic considerations all homeowners should take into account when choosing a plan.
“Your rates might be lower if you live near a fire hydrant.”
First is the replacement value. This is not the same thing as the amount you paid for your home or the things in it. Rather, it represents the cost to rebuild or replace the home, appliances or personal items.
Another thing you’ll want to consider is where you live. For example, if there are certain features of your neighborhood or community that make you and your home safer, such as proximity to a fire hydrant, your rates might be lower.
Your location will also determine what sorts of natural disasters and other risks are more prevalent to you. For instance, if you live in California, you may want to consider earthquake insurance in addition to your regular policy, as damage due to earthquake is generally not covered.
Homeowners insurance generally doesn’t cover business use of your home. So, if you plan on running a small business out of your house, or if you will have a home office, you might want to consider getting an additional plan to cover these items. However, according to the National Association of Insurance Commissioners, your laptop or computer may be covered under your regular policy.
Double check what’s covered
Some of the most basic items that will likely be covered under homeowners insurance are the structure of your home (but not the land it’s sitting on), your clothes and personal items. Plans vary from provider to provider, and some may include items that others do not. Don’t assume your fine jewelry, sports equipment or expensive electronics are automatically covered; ask your insurance provider.
Also, it’s important to know what situations will be covered by your insurance. Theft and vandalism are likely included in the coverage, but some providers may have specific circumstances under which your insurance claim may not be covered.
Living expenses may also be covered should you be temporarily displaced in the event of a fire or other disaster that renders your home uninhabitable. Again, different providers will have varying levels of coverage as well as different rules about when this applies.
To learn more about what sort of home will best suit you and how to finance it, talk to the lending experts at Lenox/WesLend Financial or call 844-225-3669. As heard on the radio, it’s the biggest no-brainer in the history of mankind.