3 Surprising Facts about Home Insurance That You Should Consider Before Making a Purchase

Your house represents one of your most valuable assets. This is precisely why you need to realize that an accident, a burglary attempt, a natural disaster or an act of vandalism could impact its functionality and its curb appeal and make you spend a significant amount of cash to bring it back to its original condition. To keep all these risk factors under control, it is highly recommended to invest in a great homeowner’s insurance policy. If you are ready and willing to make this step, make sure you understand every single detail related to the kind of coverage that you are planning to get.

Obviously, there are various kinds of policies and all of them display different features, benefits and price tags. Buying this type of insurance shouldn’t be a hassle. On the contrary, it should be an enjoyable experience. If you want to save time and money while accomplishing your mission, all you have to do is rely on Insurance Quote Depot to compare home insurance rates by zip code. Once you know how much money you should actually take out of your pocket to pay for you home insurance, everything seems easier. Even in this phase, there are some other aspects that you should factor in before signing on the dotted line. Keep reading to discover some of the most important and surprising facts about homeowner’s insurance policies that you should analyze before making a purchase.

1)      You Can Save Money by Opting for a Policy with a Higher Deductible

Insurance experts advise us to apply a clever strategy to cut down expenses. You could go in favor of a home insurance policy with a higher deductible (representing the amount of money that you would have to put on the table to repair or rebuild your home if it were to be affected by a natural or man-made threat). By buying a policy with a higher deductible you instantly unlock the door to considerable savings. This is because huge deductibles are paired with low premiums. It actually makes sense, because you would take on a big risk by purchasing such a policy. If your house would require repairs estimated at 800 dollars and your policy would have a 1,000 dollars deductible, you would have to support the costs without hoping to obtain any monetary advantages from your insurer.

On the other hand, if the costs of your repairs would be evaluated at 5,000 dollars, you would have to come up with 1,000 dollars and the insurance company would offer you the remaining 4,000. Be careful though, as things are not always as simple and transparent as you may be inclined to think. For instance, in some cases, insurance companies have different kinds of deductibles associated with different kinds of losses, so make sure you discuss your options with a broker or a lawyer before buying insurance to avoid less than satisfactory transactions and mistakes that could leave you high and dry in no time.

2)      Replacement Cost Versus Cash Value

Another essential thing that you should consider before buying home insurance is this: would you insure your property for its actual cash value of for its replacement cost? In the end, the final choice is up to you, but keep in mind that insurance specialists advise you to opt for the second alternative. Cash value would enable you to replace old, destroyed property with goods of a similar type and quality, but you would inevitably lose money because your insurer wouldn’t reimburse the entire amount of cash that you would actually need to purchase a brand-new item.

This happens because the insurance company deducts the product’s years of wear when it comes to covering your losses. To eliminate this inconvenience, you could always get replacement cost. While cash value covers the value of your belongings at the time when they were destroyed and seldom gives you the chance to actually buy new items of similar quality to replace the old ones, replacement cost allows you to cover your prejudice and get awesome substitutes for your destroyed contents.

3)      Your Homeowner’s Policy Is Actually a Package Comprising 6 Components

When it comes to selecting the right coverage, note that a homeowner’s policy is actually a mix of 6 important elements that cover the following elements:

1)      The interior and exterior of your property

2)      Additional structures located on your property (fences, sheds, detached garages and so on)

3)      Personal belongings

This concept is very broad and can cause a lot of confusion. Just to make things clear, personal belongings are assets that are not attached to your walls, so basically anything that you could lay your eyes on inside the house, from furniture to curtains, decorative objects and carpets. Here is where is gets really tricky: despite the fact that jewelry are considered personal property, pieces with a value exceeding 1,000 dollars are not covered by your insurer, unless you choose to invest in an additional policy designed to protect your luxurious assets. Therefore, it you own artworks, expensive jewels, fur coats and any other high-end insanely expensive belongings, don’t hesitate to minimize risks by spending a bit more on additional coverage.

4)      Living expenses reported by beneficiaries if they would have to relocate for a limited period of time because the home is not livable

5)      Losses reported by other parties, associated with the beneficiaries’ properties

6)      Medical expenses triggered by injuries sustained by other parties on the beneficiaries’ properties

Let’s face it: buying the right insurance policy can be quite complicated and time-consuming. To simplify your mission, compare homeowner’s insurance rates by zip code and consult an insurance agent before making a final call. Never agree to sign on the dotted line before doing your fair share of research. Remember that a misguided purchase can make you lose money and put your most valuable belongings on the line. Opt for an attractive policy in your price range and discover its benefits with just a little bit of help from an experienced insurer.