what do I need to know about home insurance coverage
When you’re in the process of buying a home, there is so much to do, and a lot to keep track of. If you’re getting a mortgage, like most people do when making such a large purchase, your mortgage company will require you to purchase home insurance coverage.

You may wonder what a homeowners policy covers. To help you with your home buying process here’s a quick guide to navigating the homeowners insurance waters.

What is home insurance coverage?

Basically it’s insurance providing compensation for damage, loss or injury of property, personal belongings, or persons due to fire, theft, and accidents.

What does it cover?

A standard policy, and what your premium typically pays for, is a package covering:

  • Your dwelling;
  • Other structures such as a detached garage or fence;
  • Personal possessions;
  • Loss of use or your living expenses if your home is uninhabitable for a period of time; and
  • Personal liability and medical payments if someone sues you for injury incurred on your property.

How much does it cost?

The main two factors determining the cost will be the dwelling and the amount of your personal possessions.

As for premium costs, the best thing you can do is call around and get multiple quotes to find the best deal not only from a monetary perspective, but also what is covered in each policy.

How much do I need?

The amount of dwelling coverage you buy should at least equal the full replacement cost of the home. You can have a home builder walk through your property to determine this number.

As for personal belongings, make a list of the items you own, starting with the most expensive first, and try to calculate how much it would cost to replace everything. A good rule of thumb is to insure personal belongings at 50% to 70% of your dwelling coverage amount. If you think you need more coverage, contact your insurance provider to request higher limits.

Keep in mind there may be limits on how much insurance you can purchase for expensive personal possessions like jewelry, silverware, and more. Make sure to ask your insurance agent to look up any items you deem more valuable than normal.

Don’t forget to ask for help

Keep in mind these are the basics of home insurance coverage. If you have more questions or aren’t sure if your policy will cover something, ask your agent for assistance. After all, you’re paying to feel secure.

What questions have you had answered about home insurance coverage?

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