Most homeowners are required to take out home insurance by the bank holding their mortgage. Before you can close on a property with a mortgage, you must have a policy in place. The amount specified is minimal and homeowners most often prefer to extend the coverage for more protection.

Readily available in the market, home insurance should be treated not as an expense but rather as an investment in a very important asset.

Homeowners insurance combines protection in two different ways. It insures against hazards and liability.

Hazard Insurance covers:

• Unintentional damage to your home and its contents caused by fire, storm, theft and vandalism.
• The cash value (the worth at that point in time) or replacement value(fully replaces what is damaged).
• Flooding or earthquakes in certain areas; your lender will require extra insurance.

Special Property Coverage: Cash, jewelry and other precious items will not be covered by your home insurance, so ensure that you get a supplemental policy as needed. Equipment linked to a home office also needs special coverage.

Liability covers:

• Personal liability for any accidents on your property after which a visitor might need medical treatment
• The policy will have a limit up to what it will pay

What factors affect your insurance premiums?

• Older homes and certain building materials often cost more to insure.
• Your home’s location, for example it could be in an area where floors occur frequently.
• If you have fire extinguishers, burglar alarms etc., expect a reduction.
• Personal factors like a good credit record or if you are a smoker will affect your premium.
• The more claims you make the more you must expect to pay.

Don’t forget to provide your insurer with a complete and up-to-date inventory to ensure that potential future claims are settled faster.

I offer referrals for reputable home insurance providers. Contact me for this info and more when you are ready to buy or sell a home.