Buy Homeowners Insurance

There are two basic reasons to buy homeowners insurance. The first reason is related to your net worth. If you can’t afford to lose the monitory equivalent of the equity you have vested in your home in the case of a disaster, then you should buy homeowners insurance.

If you don’t own your home free and clear, but like most of us, you share ownership in your home with your lending institution, you probably don’t have a choice whether to buy homeowners insurance.

Most lenders require a homeowner to insure the home against damage or loss for at least the amount owed to the lender on the mortgage. So in the second case, it is your banker telling you to buy homeowners insurance.

Homeowners need to understand many facets of policies and what the policies protect before going to buy homeowners insurance. Dwelling coverage typically insures your building; structures attached to it like a deck and fixtures which include built-in appliances, electrical wiring or the furnace.

The term other structures usually refers to detached garages, sheds or out-buildings. Fixtures attached to the structures include fences, sidewalks, patios and retaining walls.

Additional property coverage refers to insurance policies that provide such items as removing debris like limbs, damaged trees or shrubs from the premises; fire department service charges; property removal like an old refrigerator; theft; building collapse and glass breakage if caused by policy covered dangers.

Another type of blanket coverage insurance, which protects homeowners against items other policies miss, is called a home protector policy. This is another form of personal insurance which covers items like your new plasma television being hit by lighting, or if some thief takes your car, goes joy riding in it, doesn’t have their own insurance and raps your car around a tree.

This is another policy that you may want to consider when buying homeowners insurance.

Some other added coverage insurance is called endorsements. These value added insurance options are extra protection for extra costs. Endorsements include guaranteed replacement coverage for the cost of building a new home; extended replacement coverage, which is just like it sounds.

If the cost of replacing your home has overruns this covers the extended replacement figure by an additional 20 to 25 percent; inflation guard pays for increases in the inflationary premium costs for maintaining your policy; scheduled personal property for items like furs, jewelry, stamps, guns, coins, computers and antiques, and this insurance can be extended to cover cash, bank notes, securities and deeds; secondary residence insurance which covers a cottage of lake home; theft coverage protection for items like 4-wheelers or watercraft without proof of forcible entry and credit card forgery protection which protects against loss, theft or unauthorized use of credit cards.

The reason a homeowner needs to add endorsements when he looks to buy homeowners insurance is because of exclusions to his policy. That is what isn’t included in your insurance protection.

Things like personal computers and phone systems are usually excluded. Normal wear-and-tear, basement flooding and earthquake damages are almost never covered by a basic homeowners insurance policy.

If you need answers to insurance questions, the state department of insurance is an agency you can trust to give you straight answers.