What Kind of Homeowner’s Insurance is Right For You?

When you’re wading through the legalities of buying a home, the process can be daunting, especially if you’re a first time buyer. Interest rates, mortgages, and appraisals, oh my. Read on as we weigh in on what type of homeowner’s insurance is your best bet.

For most buyers, a standard insurance policy will do. These basic policies protect against several natural disasters and catastrophic events. However, it will not guard against earthquakes, floods, war, and nuclear accidents. Looking for a little extra disaster coverage? The policy can be expanded to include these disasters as well as coverage for such things as workers’ compensation. In fact, the lender may require that you purchase flood or earthquake insurance if the house is in a flood zone or a region susceptible to earthquakes.

Looking for even more coverage? You can increase coverage beyond the depreciated value of personal property, such as televisions and furniture, by purchasing a replacement-cost endorsement. And dome-based business-coverage, once overlooked, is an increasingly popular rider. It does not cover liability associated with the business but rather contents such as home-office equipment and general liability to cover injuries to clients and employees.

Other considerations: an inflation rider, which increases coverage as the home’s value rises, and getting insurance that is equal to the full replacement value of the home. In these instances, insurance companies usually require an amount equal to at least 80 percent of the full replacement value. Otherwise, only a portion of the loss would be covered.

As a Member of the Top 5 in Real Estate Network®, I have a wealth of real estate and homeownership information that may be of help to you. Feel free to contact me any time to learn more about this important information, and be sure to forward this article on to any friends or family that may be interested as well.

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