subject: How Much Homeowner's Insurance Should You Purchase? [print this page] Most mortgage lenders require homeowner's insurance.If anything happens to your residence, the lender must know the loan will be paid for.There could be a requirement to get more coverage than what the lender requires.
The structure of your home is what Homeowner's insurance covers. Most policies also automatically cover your belongings which are in the house, up to some specified amount. But there are numerous factors to consider when determining whether you have enough homeowners insurance.
Your house itself should have enough coverage to repair it at current construction costs. This will generally be more than the cost you paid for the house. Your mortgage lender will probably only require you to have insurance for the amount of this mortgage, so considering additional coverage is wise.
Natural disasters cause rebuilding expenditure to rise. In this case, your policy probably won't cover the additional cost. There are additional policies that pay in excess of the standard policy. They're called guaranteed replacement policies, or extended policies.
Your personal belongings are also covered up to a certain point according to your coverage. You can get more coverage from the agent if this is not enough. It is worth noting that the standard coverage often covers the cash value of your belongings. If you would like them covered for full replacement value, you are able to obtain coverage for that at an additional charge.
Most homeowners insurance covers your living expenses should you be unable to live in your house after a covered disaster. That means that the policy pays for a hotel room plus your meals while your home is being rebuilt. You can always adjust your coverage if you discover it not covering enough.
Homeowners insurance also handles liability to a certain extent. If someone is hurt or receives some kind of damage from the property, you would be covered. Usually it covers courts costs and damages up to $100,000. Additional coverage needs rely upon your individual situation.
To determine how much Homeowner's insure you need, you need to determine what it costs to build in your area. Once you find that out, multiply your square footage times the cost to get your answer. Your agent can also get you that information. You might also want to consider the risk of hurricane or tornado damage, fire hazards, risks to your personal belongings, and risks to people who visit you. If you are at risk for any of those, you would need to add coverage.
Adequate homeowners insurance is important just in case anything happens to your home or belongings. Getting proper coverage when you purchase your home and keeping it after your mortgage is paid off can give you peace of mind. If disaster happens, it's good to know you're covered.
by: stevrwgaju
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