Buying a home is an exciting milestone, and probably one of the biggest purchases you will ever make. You will want to protect the beauty and value of your home with a homeowner’s insurance policy. But how do you pick the right one? And how do you know how much coverage you need? Here’s some information about homeowner’s insurance that can help take the guesswork out of selecting a policy.
When it comes to homeowners’ insurance, keep in mind that it doesn’t necessarily matter what you paid for your home. You need coverage for what it would cost to rebuild. If you aren’t able to afford insurance for 100 percent of the home’s value, be sure you’re covered for at least 80 percent. This can be beneficial in case of a partial loss.
Among the different types of homeowners’ policies, cash-value insurance is the least expensive. This will pay you whatever your valuables would sell for at the time, which is unlikely enough to replace them.
Replacement-cost insurance will cost more, but may be worth the extra expense. This insurance will replace the items that are damaged or lost with something new. With some policies, there may be a cap of $1,000 or more to replace such valuables as jewelry or artwork. So if you have valuables worth more than the cap, consider adding riders to your policy.
Guaranteed-replacement cost insurance will offer the best coverage and has no price cap. Generally, however, it will not cover the expense of upgrading your home to meet building codes that may have changed since your policy’s issue date.
If you would like more real estate advice, call me. As your real estate professional, I am here to answer your questions.
