Consider These Additional Coverage Options on Your Homeowners Policy
You need a homeowners policy when you own a home. If you have a mortgage on the property, it’s required. Even if you don’t have a mortgage though, it’s just the smartest way to protect yourself against disaster. The problem is that your standard homeowners insurance might not be enough. You may want to consider the additional coverage options below for ultimate protection.
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Replacement Cost Coverage
The standard homeowners policy covers the value of the home when you buy it. What happens when the value of the home increases? Let’s say your home burns down to the ground 10 years after buying it. The coverage you bought ten years ago probably won’t cover the cost of building the home again. Securing replacement cost coverage can help cover that gap, giving the money necessary to rebuild your home once again.
Standard homeowners insurance policies do not cover floods or any type of water damage. If you live in a flood zone, as determined by FEMA, you’ll need to purchase a separate policy. While it might seem like just another added expense, it can help you in the event of a flood. Water damage is extremely expensive without insurance coverage as it can damage many areas of your home that you don’t even realize. Your homeowners insurance will not cover the damages that are caused by water.
You can have earthquake coverage on your homeowners policy, but you have to request it because it’s an endorsement. Without the endorsement, any damages that can be tied to the earthquake would not be covered. The endorsement helps pay for damages to the home and surrounding structures. It may also cover the cost of removing the debris brought on by the earthquake.
Similar to flood damage, your standard homeowners insurance policy doesn’t cover sewer backups. However, the damages a backed up sewer can cause can be extensive. Not to mention the fact that it could put the health of you and your family at risk. It’s an endorsement worth asking about to see if you should purchase it. Generally, it’s one of the least expensive, yet most valuable endorsements you can have.
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If you run a business out of your home, your standard insurance policy won’t cover damages to equipment in the home or any liability you incur as a result of your business. A business insurance endorsement can provide this protection, usually at the value of 50% of the home insurance policy.
Buying extra insurance for your personal property might seem redundant. Isn’t that what homeowners insurance does? While it does protect some of your personal belongings, if you have anything of value, considering additional coverage is crucial.
Valuable items can be antiques, jewelry, electronics, or anything else of value that you keep in the home. The standard homeowners policy covers a small amount of personal belongings, such as $1,000 per item. If you have items that exceed the maximum value, the extra coverage is vital.
If you need extra coverage, consider purchasing a policy for each valuable item you own. You can purchase actual cash value policies or scheduled endorsements for each item. Actual cash value takes into consideration depreciation, which usually means you’ll receive much less than the item is worth. Scheduled endorsements give you a flat agreed upon amount for the item, giving you a better chance at receiving what the item is worth.
If you have watercraft at your home, you’ll want watercraft coverage. This helps protect your ownership in these items both while they are stored as well as in use. It can help protect you if you are involved in an accident or the watercraft is damaged or stolen.
Finally, you should consider additional personal injury insurance. Your standard policy covers body and property damage. It doesn’t cover personal injury. This differs from bodily injury as it covers things like wrongful eviction, slander, a violation of your privacy, or even false arrest. It covers the injuries that don’t leave physical marks on your body, but do cause you harm.
Obviously not everyone will need all of the above additional coverage options. You can pick and choose among the ones that pertain to your life. It’s always a good idea to review your homeowners policy every few years to make sure you have enough coverage to protect the ways your life has changed recently. This is also a good time to shop around and find the best deal on your insurance to make sure you make the right financial decisions.
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