Home buddies: Everything about home insurance you need to know!

Your home is an asset and as a responsible homeowner, you should do everything to protect it. There are several ways to do so such as, adding more security features to your home, repairing damages before they become serious and even getting home insurance.

Home insurance is a form of property insurance and can protect your home from various dangers. Getting your home insurance can financially safeguard you from damages or losses caused by fires, floods, earthquakes, vandalism, theft and more.

Getting home insurance for newly owned homes is very beneficial since coverage is relatively cheaper than insuring an older home. But either way, regardless if your home is old or new, getting it insured is in your best interest.

To know more about home insurance, check out everything you need to know about it down below!

What is home insurance?

As stated earlier, home insurance is a kind of property insurance that covers damage and losses due to certain occurrences such as fire, flood, vandalism, theft and so on. This doesn’t just cover the external and internal structure of your home but also its contents like furniture, appliances, home fixtures and more.

Every house insurance policy includes a liability limit, which establishes how much coverage the insured will have in the event of an unexpected event.

What does home insurance cover?

Depending on what policies you choose to get, your home coverage may vary. But most home insurance covers four main sectors such as exterior damage, interior damage, injury to a third party within your property and loss or damage of belongings.

To help you better understand what it covers, here’s an example for each one:

• Exterior damage – This is damage to your home’s exterior like your roof, your outside walls, windows, doors, your front and backyard, garage and so on.
• Interior damage – This is damage to your home’s interior such as your plumbing, your home’s wiring and so on.
• Injury to a third party – This is when a person (that doesn’t reside in your home) gets injured within your premises. Like a guest slipping on your front porch or a neighbour getting bitten by your dog.
• Loss and damage of belongings – This is when your personal belongings get damaged, lost or stolen. An example would be, your precious jewellery getting stolen, lost or damaged.

However, there are certain things most home insurance doesn’t cover – valuables like collectibles, artwork and so on, when it has been stolen, lost or damaged by flood or an earthquake.

What are the three levels of home insurance?

There are three ways you can choose to get your insurance compensation: Actual cash value, Replacement cost and Guaranteed replacement cost. To fully understand what these three levels, down below is a rundown of each one:

Actual cash value

This level covers insured items based on their current market value. This means if you buy something for $10,000, your return can be lower since depreciation is added when calculating.

Replacement cost

This level covers the actual cash value of an insured item without the depreciation deduction. This allows you to get back the original value of the insured items. So if you buy something for $10,000, you get back $10,000.

Guaranteed replacement cost

This level allows you to repair or replace your property even though the damage surpasses the policy’s limits. It is crucial that the insurance value of your house is accurate and up to date to get the most out of this coverage.

This is why the insurance worth of your house must be accurate and up to date. Some replacement cost insurance policies include a “same site” condition.

How can I get home insurance?

An efficient way to get home insurance is through an insurance broker. These are professionals that specialize in insurance and risk. Insurance brokers work for their clients (which is you) and partner with insurance agencies.

Note, they’re not permanently affiliated with any insurance providers but can recommend and help you look for policies that best suit your needs. So basically they act as an intermediary between you and insurance providers making the process less tedious and stressful for you.

As a beginner in insurance, getting an insurance broker will help you tremendously! They’ll be able to give you options on coverages, rates and companies, help and teach you to file claims, offer quality advice and even take on the tedious steps of getting insurance.

What factors affect home insurance premiums?

Eight main factors can affect your home insurance premium. These factors may vary depending on what country you’re in, but listed down below are the common factors to consider:

• The neighbourhood you live in.
• History of past claims.
• The type of coverage you choose to get.
• The amount of coverage.
• The age and current state of your home.
• The amount of your home insurance deductible.
• Crime rate.
• The availability of building materials.

What are the best homeowners insurance providers for 2023?

There are 5 top homeowners insurance providers for 2023! These providers are some to really consider, check them out down below:

• Nationwide – This provider is considered to be the overall best on the list.
• Lemonade – Provides the quickest claim approval.
• Hippo – Offer great discounts.
• Chubb – Recommended for covering high-valued valuables and assets.
• USAA – Ideal for previous military members and veterans.

The ranking may vary depending on what your priorities are. But now you know the best providers and what they’re known for, all you have to do now is choose one that best interests you.

Take away

Now you know a good sum about what home insurance is, you can now make better choices when picking out policies. It’s always essential you know about something before investing! So use your new-found knowledge and get the best home coverage for you and your family!

Knowing what you know now will reduce the risk of scams and increase the odds of you getting exactly what you’re looking for in home insurance.