Do You Need Home Insurance? What Does it Actually Cover?

Do You Need Home Insurance? What Does it Actually Cover?

When you purchase a new home, do you need home insurance? You’ll be happy to have it if you face theft, storm damage, or water leaks. But it’s critical to know what to look for in a policy and how much you’ll pay.

Keep reading to learn about home insurance — and what it covers!

Know What a Policy Does and Doesn’t Cover

Typically, a policy will cover the contents of the home and personal liability for those living there. Sheds and other small buildings on your land may be covered. And personal items in the home, excluding big-ticket items, should be included, too.

Most policies offer protection in the event of fires or theft. Similarly, you’ll be covered for vandalism, gas explosions, and ice damage.

But if the sewer backs up and turns your basement into a flood zone, you may be paying out of pocket. Ask your insurance agent for a detailed explanation of a policy so you know if it’s right for you.

This home insurance coverage is adaptable to suit your needs. You can opt to get additional coverage for issues like property damage and flooding.

Do You Need Home Insurance?

While you may not be required to get home insurance, it’s smart to do so. If someone breaks into your home or a storm damages your home, the experience could leave you with significant financial burdens. A policy can help offset the costs to repair or replace items.

If someone breaks into a car on your property, you may be covered for theft of anything inside. But the damage to the car may not be covered. Compare your home and auto insurance plans to see how — or if — they overlap.

Add insurance coverage for rebuilding costs, particularly if you live in a storm zone. Look into adding coverage for expensive items, like heirloom jewelry or antiques, too. And review the contents of your home on an annual basis so you can adjust replacement values.

Determine How the Deductible Fits in Your Budget

Deductibles are the amounts of money that you pay prior to your insurance plan covering the costs. A plan with a higher deductible may translate to a less expensive monthly payment. So, keep your budget in mind and consider looking for a cheap home insurance plan.

Also, be aware that you may have multiple deductibles if you have different policies. And any time you modify your home, tell your insurance agent so they can update your information. This could include a home remodel or purchase of fine art.

Find the Right Home Insurance Policy

Do you need home insurance? You’ll be happy you have a policy if a fire, burglar, or ice storm strikes. You can get the peace of mind you need knowing that you won’t gouge your bank account in an emergency.

Find the right policy to suit your budget and assets. And for more tips to keep your financial life in good shape, check back for new articles!