Your home is your biggest investment. Protect it by carrying the right home insurance.
What is Home Insurance?
Home insurance provides multiple protections for your home. It helps you to make repairs or to rebuild after a disaster. It also helps to fix or replace your personal belongings if they’re stolen, damaged, or destroyed. Finally, it provides financial protection so you don’t lose your home in a lawsuit.
What Risks Does Home Insurance Guard Against?
Home insurance guards against these common risks:
- Tornado, hurricane, or other wind damage
- Fires
- Burglaries
- Fallen trees
- Interior water damage
If you live in an area with a risk of earthquakes or flooding, you will usually need to add coverage for those perils separately. Earthquake or flood coverage isn’t in most standard home insurance policies.
How Much Coverage Does Home Insurance Provide?
Your home insurance policy generally covers repairs or rebuilding up to the value of your home. Instead of having a fixed limit, your insurance company sets your premiums based on an appraisal of your home.
For the belongings inside of your home, you usually choose a set limit when you buy your policy. If you have a claim, you will need to prove the value of what you owned and will be reimbursed the lower of that amount or your policy limit.
Are Jewelry and Electronics Covered?
Jewelry, electronics, cash, and certain other valuables may have special treatment under your insurance policy. They may have lower limits than your primary property coverage as a whole, or each item may have its own limit that could be well less than its actual value. You may need to add supplemental coverage or buy a separate policy to insure these items at their full value.
What About Liability Protection?
Most home insurance policies also provide you with general liability coverage. This is not just a convenience or extra feature. If you get sued and lose, you may have to sell your home to pay the judgment, or you could face financial stress that causes you to miss mortgage payments.
Your liability coverage can protect you against things like the following.
- A neighbor slipping and falling on your icy sidewalk
- A worker getting hurt inside of your home
- Your dog biting someone
- Your kids breaking someone’s windows
What is Living Expenses Coverage?
Living expenses coverage may be included in your policy or available as an option. It covers your extra expenses if you need to temporarily live somewhere else while you have your home repaired or if you have to move out and find somewhere else to live.
Does Home Insurance Cover Appliance Repairs?
Home insurance generally won’t cover appliance repairs unless the damage happened in a covered incident. Mechanical breakdowns and normal wear and tear aren’t covered by home insurance. Your home insurance company may also offer a home warranty that covers these types of claims, or you could buy a home warranty separately.
What if You Rent Out Your Home?
If you buy a home as an investment property or decide to rent out instead of sell when you move, review your home insurance policy carefully. There may be restrictions on rental activities such as the amount of time you can rent out your home or based on whether the tenant is short-term or long-term. If your rental activity is excluded, and something happens, the result could be the same as if you didn’t have home insurance. To protect yourself, you’d need landlord coverage.
What if You Don’t Own Your Home?
If you don’t own your home, you should look at renter’s insurance instead. This applies even if you’re renting a single-family home. Renter’s insurance protects you and your belongings, while home insurance protects the landlord for the value of the structure. Similarly, if you live in a condo, you would use condo insurance instead of home insurance because your condo association generally covers the building and common areas.
Do You Have to Buy Home Insurance?
If you have a mortgage, your lender will almost always require you to carry home insurance. That’s to guarantee you can repay the loan if your home is destroyed so the bank won’t lose money.
If you don’t have a mortgage, think about what you would do and where you’d live if your house burned down. Most people don’t have the savings to replace their home.
How Are Home Insurance Rates Determined?
Several factors go into your home insurance rates.
- Your home’s value taking into account the cost of the building versus the land
- Local crime rates
- Whether you live in an area with frequent natural disasters
- Any safety features you have
- Construction costs
- Your deductibles
- Optional coverages
- Your claims history
How Do You Change Home Insurance Companies?
You’re free to look for a better rate or change what coverage you have at any time. You may be entitled to a prorated refund if you cancel before the end of your current policy. When you switch coverage, you should take care to ensure that the new policy is effective before you cancel your original policy.
Work With Your Insurance Agent
Figuring out what home insurance is right for you can be complicated, especially when you start bundling it with your other insurance policies. Feldbruegge Insurance in Abbotsford, WI, helps homeowners with all of their insurance needs. Contact us now to learn more or to request a quote.
