Home insurance protects your home and personal property in case of disasters like fire, lightning, hurricane, hail, explosion, riot, air craft crash, smoke, vandalism, theft and even volcanic eruption.
Insure your stuff using your property’s replacement value and not its market value nor its depreciated value. Then ask your home insurance agent for additional coverage for your treasures like jewelries, furs, China, computer and even landscaping.
Home insurance also protects you from liabilities like injury within your property.
With this coverage home insurance sounds pretty expensive, right? So here are some tips to minimize its price:
- Survey for the best insurance company
- Present all possible deductibles
- Own a home that follows the code of construction
- Enhance security and safety system
- Make use of senior discounts
- Buy all your insurance (home, auto, health, etc.) in one company
Additional insurances that are not within the basic home insurance policy include:
- Flood Insurance
- Earthquake Insurance
- Title Insurance
- Private Mortgage Insurance
Flood insurance is only mandatory in flood-risk areas. This covers your house’s foundation, floor and walls. There are separate coverage for your other furniture and other belongings, even to your garage and shed content.
You should consider this when you live near a known fault line, on a slope, or land areas that are risked into liquefaction during quakes.
This insures you and your lender that the home you own is free from liens, encumbrances, judgments and it is proof that you really own your home. This protects not only the buyer but also the lender.
If you plan to give less than 20 percent down payment to your lender, then lenders will charge you with PMI. This protects the lender incase you suddenly default on your loan. But a law effective since July 29, 1999 cancels PMI when your balance is only 78 percent of your home’s original price.