Having homeowners insurance is an essential (and mandatory) part of owning a home. It not only covers your home and belongings in case of damage or theft but it is also required by mortgage companies before they give you a loan. Because of this, you should factor its cost in when determining what your overall monthly payments will be. In today’s blog, Family Home Loan Texas discusses everything you should know about homeowners insurance.
What Exactly Is It?
As noted above, you need to have this type of insurance if you are going to purchase a home. There are many different kinds of policies, but the core things it covers are damage to the interior and exterior of your home, personal liability for damage or injuries, and hotel or house rental if you cannot be inside your home. While you can customize policies to meet your specific needs, they also cover the contents of your home. Every policy has an amount insured, based on the value of your home and what you have inside.
The Types Of Coverage
As with most things in life, the more you are able — or willing — to pay the better your insurance will be. As mentioned earlier, you can add things to your policy in order to fit your unique needs; a new homeowner without a house full of expensive furniture will likely need less coverage. That said, there are primarily three kinds of coverage. Actual Cash Value covers the cost of your house and the value of the things you own. It does factor in depreciation, so instead of covering the cost of your belongings when you bought them, it covers what they are currently worth (a lower amount). The next step up is the replacement cost, which is the actual cash value without factoring in depreciation. This means that you would be able to replace everything or rebuild your house entirely at the value you paid for everything. Finally, the most comprehensive type is guaranteed replacement value policies. This pays whatever it costs to repair or rebuild your home, even if it costs more than your policy limit. This insulates policy-holders from market changes like inflation; construction costs, for example, often go up over time, so even if you rebuild your house to the exact specifications, it would be significantly more expensive than it originally was.
What You Shouldn’t Expect To Be Covered
While you can add on a wide variety of things to your insurance policy, not everything is covered. Natural disasters, “acts of God,” and acts of war usually are not covered. With this in mind, if you live in a place prone to flooding, tornadoes, or other natural disasters, you should purchase a rider or an additional policy to cover it. You will have to pay more, but it will certainly be worth it. Overall, you should conduct plenty of research to determine the policy that will best suit your personal needs and also take into account the area in which you live.
Contact Us To Learn More About Homeowners Insurance
We know that there is a lot to consider when looking for homeowners insurance, but we have the knowledge and expertise to help with this and the home buying process in general. Family Home Loan Texas was founded by loan originator and long-time mortgage professional Rob Bramer. Rob has helped clients secure the loans they need both locally and nationally and can help you get the loan you need to live life on your terms. Call 1-800-990-LEND (5363) to speak with Rob about how he and his team can help you through all aspects of buying a home — including insurance.