Today you are going to learn everything about home insurance policy. This will teach you how and why you need home insurance policy even if you already have one. This is very important, home insurance policy, for all home owners. Even if you have an investment property or even if you want your house to be rented it is still not appropriate to do it.
Six parts composed your homeowner’s insurance policy basics. The dwelling amount which is called the coverage is where it all begins. It should be the replacement or the rebuild cost which is synonymous to the dwelling amount. How big the check has to be to rebuild that house if it gets hit by lightning and burns to the ground?
Other structures are the next part. Do you have a barn? Do you have a garage?Is the garage available? Is shed part of your other structures? Is swimming pool available? All of these are considered other structures. The default for other structures is 10% of the coverage. The value of $400,000 if you have a dwelling, your other structures will automatically get $40,000 for free. If you need more you can buy it and if you don’t there’s no credit for taking it off.
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Personal property is the next thing. The amount is typically 50% of the original dwelling amount. This is defined as your ‘stuff’. You would take with you everything that if you would need if you were to move. It includes basically everything from your drapes, your rugs, to your clothes and even electronic devices. 50% is the typical amount while some companies offer up to 70% of the coverage without any extra charges.
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The next part is loss of use. The loss of use is if your house is made unusable or uninhabitable while it is being fixed. It is 20% typically of the coverage amount. $80,000 is the value for this case. You can send your laundry out, eat your meals out, and stay in a hotel if you need to with this amount of $80,000 which will be available for you to use to love elsewhere.
The next important coverage for this topic is called the liability coverage. You can use this amount if you get sued. Some examples are, if your dog bites a neighbor or if you’re cutting down a tree with your chainsaw for the first time and it lands on your neighbor’s car. When you’re negligent and someone sues you this is for those types of things. More commonly today, $500,000, or even a million are what most people choose although your limit is at $300,000 are common.
And finally, medical payments, it’s usually a much smaller number or sometimes a thousand dollars up or as high as $5,000. Think of it as goodwill coverage.
Homeowner’s insurance policy works using these six parts.