Our explanation will jump start with the definition of the home insurance as a types of coverage insurance that cover entire home. It covers the house, other structures such as fences, and personal belongings from accidents and damages, like house fires and theft.
Also, the home insurance provides liability coverage, which pays for property damage and injuries that the home owner or members of household cause to others. Liability coverage also includes the cost of legal defence and settlements if the home owner are sued for an injury or property damage.
Some home insurance companies offer insurance that covers Additional Living Expenses ALE, which pays for extra costs if you can’t live at home because of damage that’s covered by the insurance policy. Extra expenses could include hotel lodging, restaurant bills and other services, such as pet boarding.
Some home insurance policy includes the following valuable coverage types:
Home coverage
The home insurance policy covers your house structure. The house coverage amount reflect the cost to rebuild the house based on the construction and labour costs in your area.
Property coverage
Property coverage or personal property coverage cover the cost of repair or replace your personal belongings if they are damaged or destroyed. It includes all property inside the house, such as furniture, clothes, kitchenware, and curtains.
The coverage amount for personal property is usually more than 50 percent of the home coverage amount. For example, if your house is insured for 300 USD and your contents coverage is set at 50 percent, you will have 150 USD in contents coverage.
Liability insurance
Liability insurance covers the cost of injuries and property damage accidentally caused by you or one of your family member to others. Also, liability insurance includes the cost of lawsuit judgment if you’re sued, and your legal defence costs.
Additional living expenses coverage
Home owner can be entitle to additional living expenses coverage for extra expenses, such as hotel bills, restaurant meals and pet boarding, if he can’t live at home while it’s being repaired due to damage covered by the policy.
The following are some of the best insurance companies in the United States, with no specific order:
- Nationwide
- American Family
- State Farm
- Farmers Insurance
- CHUBB
- USAA
- Lemonade
What Factors Affect Home Insurance Rates
Home insurance cost is vary depending on several factors, including:
- The position of the house
- The cost to rebuild the house
- The materials of the house, such as wood, stone, stucco and brick
- How close the house is to a fire department and water source
- The claims history in your area, such as wildfires and crime rates
- Owner personal claims history
- How much coverage you choose
What Does Home Insurance Excludes
An home insurance policy excludes the following damages:
- Government action and Ordinance of law, such as a government requirement to demolish, repair or rebuild your home to meet local ordinances, or a seizure of property
- Earth movement, including earthquakes, landslides and sinkholes
- Water damage, including floods and water backup from sewers and drains
- Neglect, such as home owner’s failure to maintain heat or install fire alarm
- Smog, dry rot, rust or other corrosion
- Discharge, migration, seepage, escape or release of pollutants
- Smoke, from agricultural or industrial operations
- Mechanical failure, breakdown that causes property damage
- Shrinking, settling, expansion or bulging of bulkheads, pavement, footings, foundations, patios, walls, floors, roofs and ceilings
- Vermin, rodents, birds or insects
- Damage, caused by an animal you own
- War
- Nuclear hazard
- Intentional loss
- Power failure
- Wear and tear
How To Select The Best Home Insurance Policy
Below are some example of how to select the best home insurance:
Determine How Much Coverage You Need
- Home coverage. The cost to replace your home and other structures vary depending on local construction and material costs, therefore it’s difficult to estimate the cost on your own. However, it is a good idea to add extra coverage, such as extended replacement cost coverage, to help account for possible surges in local construction costs.
- Contents coverage. The best strategy to calculate how much coverage you need for all your properties is by creating a home inventory. It’s a good idea to have replacement cost coverage in your home insurance policy, which pays the cost for new items.
- Liability coverage. Home owner should buy enough liability coverage to cover what she or he can pay in case of lawsuit.
- Additional living expenses ALE coverage. This coverage is typically set at a percentage of the house coverage, for instance 20 percent. However, if the owner needs more, he or she can increase it. This pays the extra costs if the owner can’t live at home due to damage.
- Other coverage types. The owner can fill gaps in a policy with other coverage types, for instance flood insurance, earthquake insurance, water and sump overflow, and home systems breakdown coverage.
Compare Home Insurance Quotes
As the costs vary considerably for the same coverage, It’s important for the home owner, who is seeking insurance, to compare home insurance policies from multiple insurers. The home owners can get free home insurance quotes from:
- Website. Home owner can find an insurance quote from an insurer’s website or by visiting a website that specializes in providing multiple quotes at once.
- Local insurance agent
Home Insurance Discounts
In the insurance market there is always a different types of discounts. The home owner should ask for discount in any discussion. Following are some common types of discount that some insurers are offering:
- New or renovated home discount. it a discount price that often requires upgraded wiring and plumbing.
- Safety and security discounts. If the home owner have some fire safety devices, for instance smoke alarms, and security devices, such as burglar alarms and deadbolts on exterior doors, placed in the house, he or she can be eligible for safety and security discounts.
- Roof age discount. If the home owner have a new roof, the insurer might lower the insurance rate.
- Disaster preparedness discount. This discount can be offered if the home owner take safety steps, such as installing storm shutters and shatterproof glass, to protect his or her home against natural disasters.
- Multi-policy discount. This discount is achievable if the home owner buy more than one type of insurance, such as auto, RV and motorcycle insurance, from the same insurance company. Bundling auto and home insurance is typically the best way to receive a discount.
- Multi-home discount. If the home owner is applying for more than one home insurance with the same company.
- Claim-free discount. Home owner can ask for a price break when he or she has no recent history of insurance claims.
- Insurance payment discounts. This discount can be offered when the cost of insurance has been paid online and in full.
- Employment, organization and association discounts. To be eligible for this discount, the home owner must be working as educators or if he or she is a member of a union, professional organization or alumni association, that might have an affiliation discount with the insurer.