Is Your Homeowner's Insurance Enough?

By: Vicki Hat

Many people are buying homeowner's insurance (HOI). They buy this not because it is required by the lenders but also to protect themselves to the cost of damages brought about by the different hazards in life. Aside from that, this also helps them pay for any injuries that their homes has caused to other people, may be as guests or not. This kind of insurance is very important for this matter because the damage can be very expensive to pay out of pocket. With the help of insurance, the homeowner's burden will be lightened a bit because all they would have to pay is the deductible (which is a fixed amount) and any excess of the full amount covered by the insurance.

However, some people are very disappointed with their homeowner's insurance. They feel that it is not enough. And they sometimes discover this too late. Some have experienced being so shocked only to be denied of their claim because the kind of damage occurred is not within the policy. This can be very frustrating; especially you do not have enough money to cover for the amount. Hence, many homeowners are left with the question if their HOI is enough.

Determining what is enough

Your insurance can be enough if it can cover all the possible damages that could take place within your property. To know this, you need to know by heart the conditions listed in your policy. This is the only way you can identify if you are properly covered. You need to look into the following things:

1. How the cost will be calculated? Will it be based on replacement cost or actual cash value? If it is actual cash, shift to a policy with guaranteed replacement cost especially if you have antique houses.
2. Analyze the policy and check if there is coverage for cost of living and loss of personal stuff.
3. Coverage for cost of living will pay for the accommodation you have obtained while waiting the house to be rebuilt or repaired. This only pays for a percentage of your insurance. On the other hand, lost of personal possessions will pay for both your stuff and valuables that has been damaged or stolen.

4. Understand the liability insurance. Most liability insurance has a standard coverage of $100,000. However, if your homes have had several histories of accidents, you can increase your coverage up to $1,000,000. But if you are so sure that your house is safe, you can settle for the basic.

But you also have to consider your funds. You also have to get the best of what your money could afford.

Therefore, it is important that you know your policy by heart. You must also pay attention to the natural disasters that are common in the area. If your basic HOI covers for this then good for you. At least you do not have to spend for the additional coverage. However, if not, you really have to prepare yourself for it. For sure, having the insurance is worth it.

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