For those who own a house, home insurance is a nonnegotiable. Whether you're paying off a mortgage or the house is paid in full, it's important to cover potential disasters like fire, theft, and some types of liability--but not all coverage is the same! There are many different policies that provide specific coverage at various prices. Of course, your goal is to find the most coverage for the lowest price. |
Types of Coverage
Coverage varies from company to company, but the basics typically remain the same. Generally, there are three different types of plans to choose from: HO-1, HO-2, and HO-3.
HO-1 protects you from paying for damages caused by fire, theft, and some liability categories. This is the most basic coverage that you can find in a generalized package.
HO-2 includes the above protection plus damages that are caused by broken pipes, ice and snow, and even broken water heaters. Water can cause significant damage, so if you have expensive items that would be susceptible to water damage, this option may work best for you.
HO-3 is the most comprehensive plan. It covers just about everything except for earthquakes, nuclear accidents, floods, and damages from war. Typically, earthquakes and floods are their own category. You can get coverage for them if you live in an area prone to these natural disasters.
Finding the Best Coverage
In order to determine the type of coverage that is best for your house, you'll need to determine what possessions you want to have protected. List all of your valuable belongings, and also list the amount of coverage you'd like. You may also want to check your budget and see how much money you can afford to spend on home insurance.
Ask around about companies. What companies do your friends use to protect their homes? Who does your real estate agent recommend? How about financial planners or CPAs that you've worked with in the past? They often have brokers that they'd heartily recommend!
Once you've found someone, create a list of questions you'll need answered:
* Based on your specific situation, which coverage would the broker recommend? * Which items are included under the home insurance policy you're considering? Which items are excluded? * If you work from home, ask about coverage for your personal office. * If you run a business from your house, ask about additional coverage for your business. * If you own antiques or expensive jewelry, are these covered under the form you selected? Will you need to pay more to have them covered in full? * How much coverage for personal liability is provided with the form you chose? * What is your policy's deductible? * What personal property does the policy cover? What does it exclude? * Can you bundle auto and home insurance to get a reduced rate? * How are claims handled if you do experience damage or loss.
Don't hesitate to talk to multiple companies. If you feel uncomfortable with the coverage offered by one company, talk to another broker! The more research you do, the better off you'll be in the long run.
When looking for comprehensive home insurance, Bridgewater, NJ locals can visit http://www.lafontaineandbudd.compersonal-insurance for more information.
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