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Homeowners Insurance

As homeowners, many people are happy just to have somewhere to call home. But when disasters happen, your home can be damaged beyond repair without the proper insurance. Homeowners insurance is a hugely beneficial asset to protect a home against unpredictable damage.

Homeowners insurance is a type of policy that protects against legal liability of anyone being harmed on your property. It also provides insurance coverage for damage to the home. Most disasters are covered, but separate policies are required if the homeowner wants protection against earthquakes, floods, or poor maintenance.

A home insurance policy is required by most lending companies for a homeowner to receive a mortgage. Homeowners that are not required to own a policy are wise to purchase one anyway as a means against liability and cost of repair. There are many ways a home can become damaged: Water damage from a leaking pipe is quite common, as are mold and fire. Differing policies may not cover all of these disasters, but fire is almost always included in the homeowners policy.

There are generally three different levels of coverage. The first is actual cash value, or the value of the home and your belongings minus depreciation. The second is replacement cost, in which depreciation is not subtracted; this level allows you to actually replace the things that were lost. The third level is guaranteed/extended replacement cost. This level is a buffer against inflation that allows you to rebuild your home and replace your belongings at any cost, even if it exceeds the value of your policy. There is usually a ceiling of 20-25% above the policy limit.

Home insurance is a fantastic fail-safe for any homeowner concerned about the possibility of disaster or unforeseen damage to the home. You can’t choose when these things will happen but rather have to roll with the punches. A homeowners policy allows you to do so without breaking the bank.