5 Things to Look for in Homeowner’s Insurance

Congratulations! You’ve bought a home and you want to protect your purchase. While investing in maintenance and general upkeep will certainly help your home maintain its quality, it won’t protect you or your property from unexpected events. If a storm or severe weather causes severe damage to your home, will you have the funds to pay for the repairs? If you’re like most homeowners, the answer is ‘no.’ This is why you need to acquire some form of homeowner’s insurance to help protect against unforeseen events.

Homeowner’s insurance is extremely important, but no two policies are exactly alike. You’ll need to shop around to find the best homeowner’s insurance company that meets your needs and works for your budget. So, before you start searching for a new policy, let’s examine the 5 things to look for in homeowner’s insurance:

A Loss-of-Use Clause

If your house is damaged and the repairs will take some time to complete, you’ll want a loss-of-use clause in your homeowner’s insurance policy. This clause will cover some living expenses while you wait for the damage to be fixed. In some cases, you may be able to live in your home while it’s being repaired. However, if the damage is extensive or it poses a risk to your family’s health, you’ll definitely want to make sure that your homeowner’s insurance policy will help you pay for your living expenses in the meantime.

High Liability Protection

The standard liability protection for a homeowner’s insurance policy is $300,000. While this may be more than enough for some homeowners, it could be woefully insufficient for others. Generally, you should base the amount of liability coverage you need on the value of your house. If possible, try to get liability protection that equals at least 80% of the value of your home. In some cases, insurers require you to maintain this much protection to be fully covered anyway.

Home Business Endorsement

These days, a lot of people do some or all of their work from home. If this applies to you, you’ll definitely want a homeowner’s insurance policy with a home business endorsement. If your house is damaged and your policy covers it, you can get reimbursed for any business-related equipment that gets damaged. This could end up saving you thousands if you have expensive work equipment in your home.

Discounted Premiums

Many people don’t realize that they can get reduced premiums on their homeowner’s insurance. However, you will often need to make some investments up front. For example, you can get as much as 20% taken off of your premiums by having a home security system. Some companies offer discounts based on how many policies you get. Combining two or more policies from the same company can save you money and provide you with a greater level of coverage.

A Guaranteed Replacement Clause

A guaranteed replacement clause is by far the most important feature of a homeowner’s insurance policy. With this clause, you get coverage to rebuild your home. Alternatively, with a standard cash-value policy, you may be left with the bill if some or all of your house needs to be rebuilt due to damages. A guaranteed replacement clause can cover as much as 150% of the value of your home, depending on the nature of your policy.

Shopping for homeowner’s insurance can feel stressful at times, but it doesn’t have to be. As long as you know the kind of coverage that you want and need in advance, you’re all set. For more information on homeowner’s insurance, check out this article on how homeowner’s insurance may not be insufficient for some home-based businesses.

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