What is Home Insurance?
Residence insurance protects the financial investment that you made in your building or house. Residence insurance isn’t really having the type of insurance; it is only a type of a “homeowners’ policy”. The Residence Insurance covers the liability when someone is injured in your premises, damage of your home’s structure, and damage of your own belongings. Residence insurance also covers the additional expenditure you spent for your living if your damaged house still can’t be lived in. The amount of the residence insurance coverage depends on how much you pay for the insurance and what kind of policy you purchased. To clear your mind on what type of policy you should get, here are some general coverage you can choose.
What are the Coverage Options?
When you but a home insurance, you can see that there are so many policies you can choose from. Based on Insurance Information Institute (III), the most common policies are Limited (HO-1), Basic (HO-2), and Special (HO-3).
Limited (HO-1) covers 10 perils that include accidental calamities such as smoke, theft, vandalism and fire. This is also called “bare bone policy”.
Basic (HO-2) covers damages that is due to frozen pipes, water damage and weight of snow and ice. This covers 16 accidents.
Special (HO-3) covers all possible accidents except damages due to natural calamities. This is the most known policy in residence insurance.
You should keep in mind that this doesn’t include all perils it depends on what policy you purchased. Residence Insurance is suitable for other kind of residence such as condos, Historic house and mobile homes.
What are the Levels of Coverage?
When you already decide what policy suits you, you must be considerate on the level of coverage that will suit your needs. There are levels of coverage which are actual cash value and replacement cost and guaranteed replacement cost.
Actual Cash Value has a minus depreciation rule. This will pay to replace your house or personal belongings. You cannot be reimbursed by the full cost of your house or belonging. Replacement Cost has a without a deduction for depreciation rule. This will also pay your house and belongings but in a different way. Here, you can be reimbursed by the full cost of your house or belonging. Guaranteed Replacement Cost guarantees you to reimburse you to whatever cost you have to rebuild the house or replace the damaged belonging you have. The nice thing about this is they will pay you even if it exceeds the limit of the policy.
How to Save Your Money
Whatever residence you live in, you can save on residence insurance by doing these following.
Search on shopping sites such as InsureMe.com when you shop online. In this way, you can compare many advices and suggestions from local insurers and find what will suit you.
You should increase your deductible. When you pay more out-of-pocket claims, it will shrink the premium. Just be sure you can afford the deductible you chose.
When you combine your home and vehicle policy, you can get a discount from the company.