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Homeowners Insurance Coverage – What Do You Really Need?

You know you need homeowners insurance, but how much and what kind of homeowners insurance coverage do you need? Here are some tips to help you decide.

What does homeowners insurance cover?

Homeowners insurance provides coverage for damage to your home, and most of the property in your home, caused by theft, vandalism, fire, smoke, plumbing damage, electrical damage, and acts of nature.

Homeowners insurance also provides coverage for liability claims and legal fees if someone hurts himself and sues you.

Most insurance company's standard policies do not insure you for damage caused by floods, earthquakes, nuclear accidents, terrorism, and war. They also limit coverage for expensive items such as jewelry, antiques, furs, collections, etc.

How much homeowners insurance coverage do I need?

Lenders often require homeowners to purchase homeowners insurance based on the appraised value of their home which includes the value of the land. Because you do not need to insure the land, this is not the amount of insurance you need.

Instead, find out from a local builder what it would cost to rebuild your home, or find out what building costs per square feet are in your area, multiply that figure by your home's square footage, and use that figure for your insurance amount.

If you have expensive items like jewelry, antiques, furs, and collections that are not covered by your policy, you can buy separate insurance, known as a rider, to cover these possessions. You can also get insurance to cover floods and earthquakes.

How can I save money on my policy?

You can save money on your policy by raising your deductible – the amount you pay on a claim before your insurance kicks in. Raising your deductible from $ 250 to $ 1,000 will save you up to 25{4917788a0bd7aa7369c2a945027b4fe6c9853cda4150a24fe1255b18ce3083dc} on your yearly premium.

Another way to save money is to bundle your insurance. Placing your home and auto insurance with the same company will save you as much as 15{4917788a0bd7aa7369c2a945027b4fe6c9853cda4150a24fe1255b18ce3083dc} on your premium.

If you're a senior, many companies will give you a senior discount that can save you up to 10{4917788a0bd7aa7369c2a945027b4fe6c9853cda4150a24fe1255b18ce3083dc} on your premium. You can also get discounts if you have burglar alarms, smoke detectors, fire alarms, sprinklers, and dead bolts installed in your home.

Where can I find a reliable company with cheap rates?

The best place to find companies who will give you cheap rates is to go to an insurance comparison website where you can get rates from a number of A-rated companies. Some of these sites even provide a chat service where you can talk with an insurance professional online and get answers to your questions. (See link below.)