Best Home Insurance Company Ratings

Your homeowners insurance should have what is known as “replacement coverage.” Basically, this allows you to receive the cost of replacing a lost item without any depreciation. In other words if you suffer a loss your insurance will pay what it costs to replace the property at today’s prices.

Although different insurers offer homeowners different amounts of replacement coverage, these policies give you more protection than actual cash value coverage. For example if you had a home theater system that was two years old and a burglar broke into your home and stole it replacement cost insurance will pay to replace your system with a similar one from today minus your deductible. However, cash value policies would only give you what the two-year-old system is worth. You’d have to make up the difference yourself to buy the new system.

Replacement coverage is often more expensive because it provides much better coverage. However, it is generally the type of insurance that is in standard homeowners’ insurance policies. Still, you should also be clear that this is the type that your policy includes rather than cash value coverage. Make sure to ask your insurance agent about this and any other questions you have about your homeowners’ insurance policy.

How can I save money?

It’s important to have enough home insurance. There are other ways to save besides skimping on coverage.

Shop around. Obviously, if you get more quotes, it’s more likely you’ll get a better deal. Using a non-biased, third-party company like InsureMe is an easy way to get matched with several agents in your area who can provide you with competitive quotes.

Raise your deductible. If you’re struggling to make your payments, raising the deductible is one way to lower them. Make sure that you can afford whatever amount you raise it to without going into debt.

Make your home safer. Since insurance companies measure risk when insuring your home, it reasons the safer it is, the cheaper the premiums. Smoke detectors, burglary alarms and dead-bolt locks are relatively inexpensive ways to protect your home and, in the process, lower your insurance costs.

Make it a combo. Purchasing more than one kind of insurance from a company generally will get you lower rates. While you’re shopping your home insurance, think about getting a new auto, health or life policy along with it.

The most common policies have four types of coverage: coverage for the structure of your home, your personal belongings, liability protection and additional living expenses.Structure of Your Home

You need to buy enough insurance to rebuild your home if it is damaged or destroyed by one of the disasters named in your policy. Most standard policies also cover structures that aren’t attached to your home as well, such as garages and sheds, for up to 10 percent of the amount of insurance on your home.

Personal Belongings

Most policies offer coverage of your personal belongings between 50 and 70 percent of the amount you have on your home. When you conduct a home inventory, you can determine if that amount will suffice. Most policies include off-premise coverage, which means your possessions are covered any where in the world. If you have expensive items that you’d like additional protection for, you may need to purchase a special endorsement or floater.

Liability

Liability coverage protects against bodily injury and property lawsuits. It pays for your defense in court and any money you are required to pay, up to your policy limit. This includes no fault medical coverage, if someone is injured in your home.

Additional Expenses

If you are forced out of your home during repairs of damages caused by one of the covered disasters, a standard policy will pay for your hotel stay, restaurant bills and even reimburse you for money lost, if you rent out part of your home.

What’s the difference between actual cash value and replacement cost?

An actual cash value policy pays to rebuild your home, minus depreciation. A replacement cost policy pays to replace your home and/or possessions without a deduction.

What’s guaranteed or extended replacement cost?

It offers the highest level of protection, paying the total cost to replace your home, even if it exceeds your policy limit.

Is my home covered in case of an earthquake or flood?

Flood and earthquake insurance can be purchased separately from most insurance companies. If you live in an area prone to those types of natural disasters, you should spring for the additional coverage. They are slightly different than coverage for other disasters. For example, earthquake insurance has a different type of deductible-a percentage of coverage instead of a dollar amount. Talk to your insurer and get the specifics before you spend money on those extras.

Do I have to buy home insurance?

No, not legally. However, if you finance your home through a mortgage company, they will require you to have some kind of insurance policy. Even if you paid for your home in full, it’s wise to have home insurance to protect your monetary investment, not to mention sentimental items, such as pictures and other memorabilia.