3 Things to Remember When Buying Home Insurance

If you’ve recently bought a house, chances are you can’t wait to add your personal touch to turn the house into your home. For example, you probably have a good idea of what furniture you want to buy for each room – depending on how many people live there – and what maintenance items to purchase to help keep your home in good working order.

But a question that a lot of people have is how to determine the appropriate amount of homeowners insurance coverage to get. Figuring this out is an important aspect of ownership, and was recently addressed by business magazine Forbes.

You may be surprised as to how many people wind up under insuring their home. Amy Bach, executive director for a consumer advocacy group, told Forbes that as many as 66% of homeowners don’t have the proper amount of coverage in order to protect all of their losses in the event of a weather disaster or fire.

According to the Insurance Information Institute, there are at least four aspects to a residence that need financial protection: the structure, personal possessions, living expenses and the potential for liability.

For instance, when it comes to the structure, the bank or lender from which you got your loan will help give you an idea of what you need.

“Some banks require you to buy homeowners insurance to cover the amount of your mortgage,” according to III. “If the limit of your insurance policy is based on your mortgage, make sure it’s enough to cover the cost of rebuilding.”

The III pointed out that a quick way of going about this is by multiplying the square footage of your home by the cost per square foot to rebuild. Your insurance agent will likely have a better idea of what these are, or a local realtor.

Perhaps equally as important as figuring out how much to get is understanding what your home insurance policy protects. For instance, many people who don’t scrutinize their policies enough may assume that flood insurance is included in a standard homeowner’s policy, when in fact, it often needs to be expressly requested.

Be mindful of what your insurance doesn’t include
Additionally, people often underestimate what their coverage actually includes. For example, do you have protection from theft of jewelry and watches or do you have any non-building structures on the property? Many times these elements are not automatically included, but if stolen or damaged could result in a significant budgetary blow.

ASCE: Nation’s sewer lines are aging
Something else that’s traditionally optional, but is still an important component of homeowners insurance, is sewer backup coverage.

Based on data from the American Society of Civil Engineers, the average age of the U.S.’ 500,000 miles of sewer lines is 30. And while the nation’s sewer system may seem like it’s operating normally, backups are increasing at a rate of 3% each year, according to the Civil Engineering Research Foundation.

Water backup of sewers and drains can help provide protection in these scenarios, and though prices typically vary, premiums run between about $40 and $50 per year, according to the III’s statistics.

For more specific information on how to ensure that you are properly covered, speak with RC4 Insurance Agency, LLC today.