Why should home insurance be any different from car insurance, or other types of insurance? Most home policies are not different, but the risks you face might. If you’ve seen movies like The Perfect Storm, you know that a natural disaster can strike with little to no warning. Protecting your house against these types of calamities is as important as it is difficult. A home is an investment, and investing in a place that you love means protecting it against everything from break-ins and theft to fire and storm damage. That’s why it’s important to have home insurance on your property before anything happens. Even if your house isn’t on the market right now or will never be sold in the future, there are still necessary elements of home ownership that need to be safeguarded.
Know the Risk of Your Home
Before you even think about purchasing home insurance, you’ll want to know the kind of risk your home is facing. Home insurance is a form of risk management. If you know the risk of your home, you can then play the game of insurance differently. There are many different kinds of risks that your home could experience, but the first thing you’ll want to do is get a complete inventory of your home. What are the things that could cause you the most harm in the event of a disaster? What are some of the biggest risks to your home? It’s important to know these things so that you can put together an insurance package that includes the appropriate levels of coverage. For example, depending on where you live and if there is a hurricane season, you may want to consider adding a policy that includes coverage for wind damage.
Make Replacing Your Home Part of Your Insurance Strategy
In many ways, your home is the most expensive thing you own. So it makes sense to protect it with the highest level of coverage that you can afford. However, it’s important to remember that a high premium doesn’t always mean better coverage. You want to make sure that your premium level is appropriate for the level of coverage you want and need. If you’re able to stay in your home even after a major disaster, you can use the replacement value of your home. This is the amount you would be able to use to replace your home with another one of the same value.
Create a Disaster Recovery Plan
It’s important to have a plan in place for every type of disaster that could strike. If a major storm or fire does damage your house, you’ll want to know what to do next. In addition to having a plan in place for you and your family, it’s also a good idea to have a plan in place for your home. Make a note of all the things you’d need to recover from a disaster. These things could include your important documents, medications, photos, sentimental items, and more. If you have enough room in your home, it’s a good idea to keep a disaster survival kit there as well. It could include non-perishable foods, water purification tablets, a battery-powered radio, first-aid supplies, a manual can opener, a flashlight, tarps, blankets, etc.
Choose an Actual Coverage Ratio for Your Coverage
Home insurance companies will provide a range of different coverage ratios, with the most common being Actual Coverage. Most people choose Actual Coverage, because it guarantees that you’ll actually receive the coverage amount you pay for. But here’s the thing. If your house is worth $200,000, but your insurance only covers $150,000, you’re actually getting 20% less actual coverage than you pay for. In this situation, you could get hit with a $100,000 bill after the insurance company pays out $150,000 worth of coverage. That’s a lot to pay for a policy that covers only half your home. So it’s best to choose an actual coverage ratio that’s close to what you actually need. If you live in an area where a natural disaster is common, you’re going to want to make sure you have enough coverage to get you through.
Protect What You Need Most
Homeowners often neglect the little things, but they are important too. If you can, it’s best to get a home insurance policy that also includes coverage for personal items, as it’s one of the first things that could go missing in a disaster. It’s also a good idea to include coverage for your home’s structure and contents. Some companies will allow you to get a policy that covers your roof, walls, and windows all at once. This will help to protect you if one of them gets damaged in a storm or breaks down over time.
Establish an Eradication Process For The Rest
One of the biggest mistakes that homeowners make is not getting rid of their old house as soon as possible. Often, homeowners will wait decades before selling their old home. This is a bad idea for a few reasons. First, it could cost you a lot of money to renovate your new home should you choose to relocate. Secondly, you could be paying for a home that’s no longer in use. It’s best to get a new home insured as soon as possible. You could even choose to get a policy that pays out if you decide to sell your old house before getting a new one. This will save you some money, while giving you the peace of mind that comes with knowing that you could be covered if an event were to cause damage to your old residence.
