When you get homeowners insurance, you will be offered a variety of different plans. There are some plans that only offer the bare minimum, while there are others that will go above and beyond what you need. It is important that, before you purchase your insurance, you realistically ask yourself what you will need so that you can get the coverage that you desire. It would be terrible to need to access your policy for something that happened only to realize that it isn't covered. Here are things to look for in your policy.
1. Natural Disasters
Many times, a natural disaster won't be covered by your insurance policy. For instance, if you live in a place with a high flooding risk, there probably won't be flood insurance with your provider. Instead, this will need to be something purchased separately or tacked onto your current plan. However, even if you need flood insurance, if you live in a mountainous area, you probably don't need tornado or hurricane insurance, so that is why it is important to realistically determine what your risks are of certain disasters and purchase additional coverage as needed.
2. Complete Rebuilding Costs
If your house were to completely burn down, you would want to access your policy to get all of the rebuilding and refurnishing paid for. What many people don't realize is that there are limits to how much your insurance will pay unless you go in and decide to upgrade your coverage. You should determine if the cap on your insurance will cover what you need if the house were to become obsolete. Could you afford to rebuild it? Some people may have savings that they would use, so instead of upgrading their insurance, they will pay the difference themselves. But for many people have full coverage is desirable.
3. Uninhabitable and Relocation Costs
Lastly, if the house were to become uninhabitable, what would you do? For instance, consider what you would do if the foundation were faulty and the house started to shift and fall. You couldn't live in the house, but you would still have to pay for the house. Insurance could help pay for relocation costs and temporary housing until you get the situation worked out with the city or the builder. However, if you don't opt for this coverage, you could be paying for housing at both locations.
By realistically looking at these different types of coverage, you can protect yourself.