HOW TO CHOOSE THE RIGHT HOMEOWNERS INSURANCE

In the process of buying a home? Congrats! You’re probably reading this because your to-do list has an item like “pick homeowners insurance.” Most homeowners have this kind of insurance because it has your back when things go wrong, but why? What is it?

Read on to learn what this type of insurance is and what it often covers, along with how to choose homeowners insurance like a pro.

Please note that the information in this article is meant as general guidelines. Consult with an insurance professional for details about your specific needs.

two people holding a small model of a home

WHAT IS HOMEOWNERS INSURANCE?

Insurance is a policy you buy that will compensate you if an event listed in that policy happens. For homeowners insurance, you’ll be compensated if an event covered in your policy causes damage to your home or the personal items inside your house.

WHAT DOES HOMEOWNERS INSURANCE COVER?

Homeowners insurance often covers …

  • Damage to the interior and exterior of your home: Fire, hurricanes, vandalism, and more. Consider where you live and what kinds of damage might occur.
  • Injuries and damage done to others: This will cover you if someone files a lawsuit against you. For instance, if your dog bites a neighbor or you break a neighbor’s window.
  • Additional living expenses: If your home experiences considerable damage, homeowners insurance often covers the cost of a rental or hotel for you to live in while your home is being repaired.

TYPES OF COMPENSATION FROM HOMEOWNERS INSURANCE

Depending on your specific policy, you might get cash for damages. “Actual cash value” means that you get the cash value minus depreciation (an amount deducted due to long-term use, wear, etc.) “Replacement cost” means you’ll get the cash value without a deduction for depreciation.

There’s also something called guaranteed/extended replacement cost/value, which is a “comprehensive inflation-buffer policy” that covers anything that happens to your home, even if the amount needed is more than your policy limit.

HOW SHOULD I CHOOSE HOMEOWNERS INSURANCE?

First, figure out how much coverage you need. Add up your home’s value, the value of any freestanding structures like your garage or pool, and all of the items within your home. Then, include the value of outdoor furniture and items you don’t look at every day (i.e., your fancy grill, that antique set in the attic, or workout equipment in the basement.)

Now, it’s time to shop around for policies. Find a company that has coverage in your area, provides discounts, has good reviews on the web and social media, and offers substantial support. 24/7 assistance through services like live chat will be a lifesaver if you encounter an issue down the road.

Are you struggling to find a home insurance companiy that fit the bill? Contact us and we’d love to provide you with excellent references. Are you still on the lookout for your future home? Our expert realtors are ready and excited to help you find a house that’s perfect for you in the Madison area! Give us a call at (608) 957-2683 to get started.