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Knowing When to Shop for New Homeowner Insurance

It is easy to forget that homeowners insurance is necessary and not an accessory. When you are moving into a new home for the first time, it may be more important than ever to be sure your policy meets all of your and your family’s needs. People often neglect to purchase insurance until they face severe damage or losses, but it never hurts to plan so that you are not scrambling at the last minute. This type of home insurance covers your home, its contents, and other structures on your property from damage or loss due to fire, windstorm, theft, and more.

Things Worth Knowing When Shopping for a New Homeowner Insurance

1. How Much Coverage Do You Need?
There are four basic types of homeowners insurance to choose from Liability, Property, Fire, and Flood, which are all very different. For example, you may be faced with a situation where you must replace your roof after a fire (replacement coverage) because even though your house is not damaged by fire, it has become inhabitable due to smoke damage. Property insurance covers the building and your belongings, but it does not cover certain things like damage caused by flooding or earthquakes. You may need to purchase a separate policy for that extra coverage.

2. Replacement Cost Coverage
It is one of the most important things to consider when purchasing any homeowners insurance. Replacement cost coverage pays for replacing damaged items with new ones of the same kind and quality. Your homeowner’s policy would pay you the cash value, which is what it would cost to replace that item if you purchased it today. In general, replacement cost coverage is more expensive than cash value because it covers you in the future, not just at the time of purchase.

3. Short-Term and Long-Term Deductibles
The deductible is the amount you must pay out of pocket before your insurance company will cover the cost of damages. Once you have paid your deductible, your homeowner’s policy will pay for all damages. You can choose either a short-term or long-term deductible. Short-term deductibles are less than $500, and long-term deductibles are more than $1,000. It is best to choose a short-term deductible to avoid paying more in premiums over time.

4. Homeowners Insurance Discounts
You can save money on homeowners insurance simply by choosing the right deductible and increasing your claim-free discount. You can increase your claim-free deal by setting up a home inventory and completing a safety review. You should also report any change in your personal information, such as an address, phone number, and occupation.

5. How Old Is Your Home?
Age is one of the most critical aspects of homeowners insurance. Not only does it affect the amount you are required to pay for coverage, but it also affects the kind of coverage you will receive. For example, a brand-new home built on a new foundation has fewer risks and costs less in premiums than an older home with more problems. An older home that has been added on over time (extended coverage) may cost more than an older home (primary building).

Buying homeowners insurance is easier than you may think. With research and planning, you can choose the right policy for your needs and get the most out of your insurance policy. Take some time to consider the details of your home, its contents, and your existing insurance policies so that you can choose the best coverage possible.

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