Owning a house is an expensive venture. The house and lot are high in value in themselves, and you also need to allot a budget for maintenance and insurance. One of the first insurance you should know about is homeowners insurance. Not all new homeowners or future buyers are familiar with this, particularly how much it would cost them.
If you plan on purchasing one soon, you should know about the following information first before you shop for one.
What Is Homeowners Insurance For?
Homeowners insurance is one type of insurance policy that insures the home and the property inside. It would cover any loss that may occur should there be a home accident, emergency, or disaster. Homeowners’ insurance would also cover the person who owns the house and the people living inside the house.
This kind of insurance is vital in the long run. It would help cushion you from many financial problems should anything happen to your house and belongings.
How Much Coverage Do You Need?
If you are to purchase your first home, you should get enough homeowners insurance coverage to pay for the total replacement value or its dwelling coverage.
The total replacement value is the amount it costs to repair the house to its original condition. Its total amount would also include the materials and labor fees.
Aside from the total replacement value, you should also get enough coverage to pay for the cost of temporary housing. It refers to the amount used to pay for the cost of staying at a hotel or other accommodation until your house is fixed again.
Some homeowners would require insurance coverage on the personal property inside the house. That would depend on the homeowner’s preference. Some homeowners would prefer to have coverage on the personal property than a total replacement of the house and its contents.
How Much Personal Property Coverage Do You Need?
In terms of the coverage on personal property, the first-time homebuyer should get an amount equal to their house purchase. This coverage would cover all the individual items they bought for the house. It usually is around 50 to 70 percent of your dwelling coverage. However, homeowners who have high-value items inside their homes typically require a higher amount of personal property coverage.
What Are the Other Coverage Options to Consider?
Additional living expenses (ALE or loss of use coverage) is also something you should consider. It is a type of coverage that would pay for the amount you would use if you cannot live in your home for a certain period due to a disaster. It would also include the amount you would use for accommodations and meals. This coverage usually costs 20 percent of your dwelling coverage.
Flood insurance and earthquake insurance are some other coverage options you should consider. You should get one if you live in high-risk areas. These are only a few of your many coverage options. There are many more others that you should explore.
Conclusion
You should opt to get homeowners insurance if you’re thinking of buying a home. It is an important form of protection that can offer financial security in case of a disaster, and it will protect you from financial losses due to an accident. This information should give you a good idea about the different types of insurance for a house. Hopefully, this will help you choose the most appropriate insurance coverage for your new home.
If you want to know more about homeowners’ rental insurance and other types of insurance you should get, contact us at Quesurance. We are an insurance agency that has been protecting homeowners in Hopatcong and surrounding communities for years now. Let us help you find the right insurance for you.
