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Things happen in a hurry when you buy a new home and sifting through the details of your homeowners’ insurance policy may not be a priority. Nonetheless, it is important that you understand your coverage limits and deductible amounts before filing a claim. Consider the following features of a homeowners’ policy when deciding on what is best for you.
What Is Covered?
Most policies provide protection for four main areas. Each of these will have some type of maximum limit that will be paid out for any given claim.
- Property – covers the cost to repair your home if it is damaged or destroyed. It is important to know that flood and earthquake disasters are not covered and require special insurance.
- Belongings – provides reimbursement costs of personal items that are destroyed or stolen.
- Liability – protects against claims by others against you for bodily injury or property damage.
- Expenses – covers additional costs such as hotel rooms or other expenses that are incurred while your home is being repaired.
How Much Deductible?
Choosing the right deductible depends on several factors and won’t be the same for everyone. The deductible is what you pay out of pocket before the insurance company starts picking up the tab. Keep in mind this applies to each claim. If you live in an area of high risk then you may want a lower deductible. If you want lower payments and are willing to pay more out of pocket if something happens, then a higher deductible could be right for you.