When you borrow money to purchase a home, the lender requires that you purchase insurance to protect their interests. Unfortunately, many people who must buy homeowners insurance never really understand all of its features or how they could save money on premiums.
Here are 9 facts you should know about homeowners insurance to protect your personal finances:
Fact #1: There are different types of homeowners policies. Home insurance is pretty standard across the U.S. The most popular homeowners policy is called HO-3 and it gives you open perils coverage, which protects you against all disasters, except any that are specifically excluded in the policy. Theft, fire, and tornadoes are examples of perils.
Fact #2: Not every type of damage is actually covered. While standard homeowners insurance in Lisbon gives you many protections, such as coverage for the structure of your home, your personal belongings, loss of use, and liability, it doesn’t cover everything. Policies often state that for something to be covered, it must be “sudden and accidental.” That means if you’ve had a leaky faucet that caused damage over many months, it probably won’t be covered because you neglected proper maintenance.
Fact #3: Some belongings may not be fully covered. It’s good to know that your valuable personal possessions are insured against disasters and theft under a homeowners policy. But what many people don’t realize is that certain types of items come with coverage limits or caps. For instance, jewelry, watches, furs, silverware, electronics, and firearms are typically limited in dollars of coverage.
Fact #4: Home maintenance really matters. Insurance companies want to make sure your property is in good shape so deferred maintenance doesn’t make your home unsafe or more vulnerable to damage. Additionally, if they find that damage occurred because you neglected to maintain your home, they can deny a claim.
Fact #5: Your credit affects the rate you pay. Not only does your credit history play a role in the interest rate you pay for credit accounts – and whether you can rent an apartment – but it also affects your insurance premiums.
Fact #6: You shouldn’t always make a claim. Homeowners insurance in Lisbon is one of the only products you buy that you hope you’ll never have to use-it should be used for catastrophic purposes, not seen as a way to pay for home maintenance. Not only is repairing damage to your home a real hassle, but you may not realize that simply making an insurance claim can cause your rate to skyrocket for years!
Fact #7: There’s a deadline to make a claim. When you do need to file a claim for major damage, don’t wait too long. Many policies include a reporting window to make sure that damage doesn’t get worse over time.
Fact #8: You need to create a home inventory. If there’s a disaster, the last thing you want is to have a claim denied because you don’t have good records. Document what you own by creating a home inventory that lists your personal belongings and what you paid for them or their appraised value, with the original receipts then store it in a safe place or online.
Fact #9: You may be missing discounts. When you make home improvements or add technology that makes your home safer—like smoke detectors, alarm systems, deadbolts, and upgraded doors, windows, or roofing—let your insurer know.
No one enjoys paying for homeowners insurance in Lisbon, but when disaster strikes, having a homeowners policy can be a financial lifesaver. Is your home adequately protected?
Call our office today at 330-337-9557 to schedule a consultation and let’s find out!