When you’re buying a home, there’s a lot going on, including an insurance shopping spree. Homes are often our largest investment, which means there’s more to lose if your home is not insured correctly. We don’t want to scare you. Rather, part of our job is to ensure you’re prepared and have all the information to make the best risk management decisions for your lifestyle! The reality is, these seemingly small and familiar decisions can impact your future financial health.
So, let’s get started! First, let’s set the foundation. Every homeowner’s policy is essentially an overarching term to describe a melting pot of various coverages to address and protect the actual property, potential liabilities while living on the property, and financial help in case a covered event (like a fire) forces you out of your home.
Here are some of the most well-loved coverages you will need:
Protect your physical property with…
Dwelling: Coverage for the physical home structure.
Other Structures: Coverage for detached structures on home property (shed, fence, garage, etc.)
Personal Property: Coverage for your belongings inside or on home property.
Protect yourself with…
Personal Liability: Coverage if you or a member of your household is found responsible for someone’s injury or damage to their property. This can result in lawsuits or medical bills.
Protect your wallet with…
Loss of Use: Coverage for additional living expenses if a covered event (like a fire) forces you to evacuate your home. This could include a temporary apartment, hotel, increased grocery bill, etc.
Endorsements: There are lots of different factors, like property location, age, or condition that may require extra coverage. This could include Flood, Earthquake, Jewelry, and MANY others to tailor your coverage. The best bet is to be transparent with your insurance advisor about your day-to-day lifestyle, so they can direct you to the correct endorsements.
Here are 3 things your homeowners’ policy will NOT cover:
Business Endeavors: If you own a business or provide a professional service that operates from your home, you will not be covered. However, you should still be protected. For that, you will need Commercial Insurance, an entirely separate policy.
Your Vehicles: If you own a vehicle, homeowners’ insurance will not protect it, even if it sustains damage while sitting on your property, like your garage or driveway. This will require Auto Insurance. However, the good news is many providers offer personal insurance bundles so that you can get all of those elements covered in one place, avoid multiple renewal dates, and can even save you a bit of money.
Certain Natural Events: If you live in certain parts of the country, you are bound to face unique natural and weather-related risks, such as flooding, mudslides and others. When someone pieces together your policy, you may need Endorsements, or extra coverage, so that these specific natural disasters don’t cause you financial strife.
While you’re sorting through details of your homeowner’s insurance policy, keep in mind your specific situation. Like you, no 2 properties are the same. This will allow you to confront any gaps and determine the correct solution.