Not all policies are created equal The excitement of purchasing a new home shouldn?t be cut short by unforeseen problems that can put you in a financial crisis because you didn?t have the right insurance policy. Homeowners insurance gives you peace of mind, covering damage to your property, risk of liability, and protecting you against any legal claims.
It?s essential for any homeowner, but not all policies are created equal. We went to the experts to answer all your questions about homeowners insurance.
Which type of policy is best"
Like any other insurance, you have different policy options when it comes to homeowners. An actual cash value policy covers what the house might be worth, but not what it would cost to rebuild it. Say you wanted to sell your home tomorrow, and it?s worth $85,000. But if it burns to the ground and the cost to rebuild is $150,000, you risk not having enough coverage.
Instead, most homeowners should get replacement cost coverage, says Sarah Haun, P & C specialist at Advanced Insurance Designs, Inc. Replacement coverage covers repair and rebuilding costs, even if they exceed the market value of your home, and it takes care of things like removal of debris and basement repairs. Although most buyers opt for basic policies, some mortgage companies require that you have replacement cost coverage.
Stacey Giulianti, chief legal officer at Florida Peninsula Insurance, says there are two main types of coverage homeowners should be familia...