Homeowner's Insurance Misunderstandings....
A. UNDERSTAND EXCLUSIONS
Any insurance provider that you choose to insure your home will have exclusions that are important to understanding your policy. Since each insurance provider is different, it is critical that you know what is covered before damage happens. You don't want to be left guessing what is covered when you have to call you insurance company to file a claim.
Items like flooding or earthquake damage may not be covered if you live in an area that does not frequently experience these natural disasters. Many policies will not cover items like mold or sewage issues, which can be caused from heavy rain or flooding. You do have the option to add these items to your plan, but note that it will cost you more on your monthly premium. Ultimately you want to make sure you are aware of what your policy will and won't cover in the event that damage happens to your property.
B. BE MINDFUL OF UNDERINSURING
If you try to take the less expensive route and insure your home at a lower value, this could cause problems down the road if damage occurs. By only insuring enough to cover your mortgage, you could be left short on compensation for you personal belongings. If your home needs to be rebuilt, labor and supplies will need to be factored into the cost which may cause you to have out of pocket expenses.
Make sure you have an inventory of your valuable items which will help you determine what amount you should use for your homeowner's insurance. This will help to make sure that if damage happens to your personal items, you will not be left wishing you had coverage.
C. THE RIGHT DEDUCTIBLE
Your deductible is your out of pocket expense which you will have to pay before your insurance will pay their portion. You will want to make sure when you are choosing your deductible that you keep the number at a reasonable amount.
A high deductible will take longer to reach and may leave you paying more that you should for damages. If you choose a deductible that is too low, you will be paying a higher monthly premium than you need to. So before you choose your deductible, make sure to consult your insurance expert for help and guidance.
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