Most people realize that it’s important to have homeowners insurance but aren’t always sure about all of the reasons for obtaining and maintaining, this vital coverage. Generally speaking, a typical home insurance policy protects the structure itself. Depending on how much coverage a homeowner needs, a policy can also protect against theft of valuables and various types of damage.
Finding an affordable policy, one that’s based on exactly what you need, is a smart investment for anyone who owns a home. It’s important for people to know that homeowners policies can protect the structure and its contents against loss from natural disasters like fires, excessive wind, hurricanes, and more.
A homeowners policy can also protect against theft, a category that includes any damage a thief might cause to the home or its contents, and of course the valuable items themselves. Coverage also provides peace of mind, covers certain areas of liability, and might be required by the mortgage lender.
-Dwelling coverage: When your home is damaged by what the policy refers to as a “covered hazard” then the homeowners coverage can help pay for either repairing or rebuilding the structure.
-Personal possessions: Home insurance, and even most renters insurance policies, can help pay the replacement cost for loss of personal possessions.
-Loss of use: If you spend additional funds to live while not having the use of your home, a loss of use clause in your policy might cover excess expenses for eating out, renting a motel, etc.
-Personal liability: This type of coverage can help reimburse expenses the covered person has for accidental damage to the property of others or injury to others, while they are inside your home.
-Medical payments: Similar to liability coverage, except for the fact that medical costs for someone injured on your property are reimbursed even when the injury was not your fault.
Anyone who owns a home or is considering purchasing one in the near future should look into home insurance companies, rates and the different kinds of policies available. In today’s world, it’s imperative not only to have coverage for a home but also to have the right amount of coverage. The amount is based on the cost of the house, the value of the personal belongings kept there, and the potential risk of loss from natural disasters like lightning, fires, and hurricanes.
Even those who don’t own property should consider renters coverage for the cost of their belongings and personal liability protection.
The cost of home insurance varies from policy to policy and is based on a number of factors. If you already own a home, it’s a good idea to speak with a professional from Alchemy Insurance and find out the particulars based on the cost of the home, the estimated assessment of all of your valuables, and the local risk of loss from natural disasters.
While no dollar amounts are set in stone, it’s helpful to know that the average premium people pay for insurance on their homes in the U.S. is not exorbitant by any measure. In fact, rates are quite reasonable.
People who are purchasing home insurance, especially those doing so for the first time, should know some of the basic guidelines about how to choose the right homeowners insurance and renters insurance.
-Make a careful estimate of how much insurance you need. Before speaking with an agent, have a list of all of your valuables and their estimated values. Research the local risks for fires, floods, and other natural disasters.
-Make some decisions about how your policy should be customized for your particular needs and desires. Will you need additional coverage for valuables? Do you want high or low deductibles on the policy? What is the replacement value of the home? Do you desire extra liability coverage, umbrella coverage, or some other special types of coverage?
-Know the facts about the house before you sit down with an agent to discuss policy options. Things to include on your list: the age of the house, the state of repair for the plumbing and electrical systems, the exact square-footage of the home, the age of the roof, and what kind of shingles are on it.
There are dozens of benefits to having home insurance. Alchemy Insurance offers a full range of insurance products for homeowners, renters and anyone who needs coverage for valuable possessions of any kind. Specifically, the benefits of having a homeowners policy include the following;
-The policy is required by your mortgage lender: Even though a policy on your home is not required by law, the vast majority of lenders require that homeowners carry enough insurance to protect the lender’s interest in the house. This makes sense and is the reason why anyone who is financing the purchase of their home should have adequate coverage. In cases of fire, storm damage or other covered events, the lender’s interest is protected.
The amount of insurance the lender requires will vary from bank to bank, and from region to region. The coverage level is also keyed to the cost of the home. In cases when homeowners do not opt to purchase the amount of coverage that the lender requires, the lender has the option to buy a policy of their own and add the cost of that policy into the homeowner’s monthly mortgage payments.
-Insurance is the smartest way to protect the structure of the home against the most common types of loss, like fire, storm damage, and more.
-A standard policy is a great, and inexpensive, way to cover the replacement value of your personal belongings. In this high-tech age, those costs can add up pretty fast.
-Insurance protects the homeowner against legal liability, can help with the cost of temporary housing in the event of severe damage, and offers a healthy dose of peace of mind.
As an independent agency, Alchemy can shop multiple brands at once to find the insurance that best suits your needs.
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A common guideline is that taxpayers can only deduct the cost of rental insurance but not the cost of homeowners policies. The Internal Revenue Service does not allow for the deduction of standard homeowners premiums on a non-rental residence.
The misconception in this area arises from the fact that people typically confuse the idea of homeowners policies and mortgage insurance (premiums of which were at one time deductible on personal income taxes but no longer are). Mortgage insurance is a type of financial protection for people who are unable to make a monthly mortgage payment.
A homeowners policy, on the other hand, is the typical way for consumers to protect against losses associated with owning property. Until passage of the most recent Tax Cuts and Jobs Act, mortgage insurance premiums were fully deductible for those taxpayers who itemized. That is no longer the case because the act's new provisions did away with that deduction.
- Structure of home: Coverage for the structure of the home should be enough to pay for a replacement build of the entire structure.
- Personal belongings: Personal belonging coverage will vary greatly from person to person. In general, you will want enough coverage to replace everything you own. Omit super-pricey items like expensive jewelry and irreplaceable items. Those things should have their own separate policy. Always make a detailed inventory of personal items and discuss the desirable coverage limits with an agent.
-Liability: It’s important to purchase enough liability coverage to protect the assets you own. If someone becomes injured while on your property, you should carefully consider what might be at stake in a lawsuit. This is equally true even if your pet, a member of your family or you cause someone to be injured.
In cases where your belongings are valued at a level considerably higher than the standard liability amounts in your homeowners policy, it might be wise to opt for umbrella coverage. With an umbrella policy, claims in excess of a stated minimum coverage amount are paid once that minimum level is reached. Liability limits are usually set at a minimum on each policy.
Standard homeowners coverage usually reimburses costs to policy holders for natural disasters like fire, lightning, wind storms, hail storms, explosions, riots, air crashes, vehicle crashes, smoke, vandalism, theft and volcanoes.
However, a typical policy will not cover some kinds of natural disasters, particularly those caused by the weight of snow or ice, flood damage, any damage resulting from an earthquake, termite problems, infestations, problems associated with lack of proper maintenance, and sewer backups.
It’s important to note that homeowners, depending where they live, are susceptible to different types of natural disasters. It’s also true that different policies exist based on what the homeowner wants to add on or leave off of a standard policy.
Consumers who think their risk of damage from a specific type of natural disaster should inquire with Alchemy Insurance to find out whether such coverage can be added to their policy or whether they’ll need to seek a separate policy to cover the particular disaster risk.
In almost all cases, the two most common types of natural disasters not covered include flooding and earthquakes. Many policies specifically exclude any damage resulting from “movement of the earth,” which includes things like sinkholes and mudslides.
Most renters and homeowners policies do not cover any type of flood damage. It's important for people to understand whether they need flood insurance and know where to get it if necessary.
Because standard home policies don't offer flood insurance, people who want to protect their homes from this threat should evaluate whether or not flooding is a risk where they live. They should also find out how to add flood coverage to their comprehensive policy.
In the U.S., there are areas called "designated flood zones," and people who live there need to have flood insurance. However, it's possible for floods to happen even in non-flood zones, especially when there is excess snow melt, rising waterways, or heavy rains. For the most part, the federal government sells flood insurance to homeowners who either live in designated flood zones or who have a reasonable risk of suffering flood damage.
Anyone who wants to obtain flood insurance should decide before a flood happens because there is a standard waiting period before a policy will be issued. That means you need to have a policy in effect for a minimum number of days before flood damage occurs.