Getting the right homeowners insurance in Lubbock takes a little research and reflection on what items you need to protect. There are various ways your home can be damaged by a disaster, so you have to review an insurance policy carefully to make sure it covers everything you believe is valuable. Here’s a look at the factors you need to consider for your customized homeowners insurance plan.
Understanding Home Insurance
Homeowners insurance is something all homeowners need for their own protection, but it is also required by a mortgage lender. Having the right coverage in place allows you to sleep better at night, knowing your possessions are well protected in terms of value. The coverage prevents you from starting all over from scratch if your house burns down. Instead of losing a valuable asset, the insurance company pays for a new home. Ultimately, it’s a risk management strategy that saves you from huge out-of-pocket expenses.
The Extent of Coverage Offered
Every homeowners policy depends on what the insurance agency offers, but standard policies are fairly predictable. The standard policy usually covers repairing damage to your property caused by disasters, such as fires or storms. The contents in your home, such as furniture and appliances, are covered as well. The policy also covers liabilities related to accidents involving visitors on your property. Theft and vandalism are also covered by a standard plan, but premiums are usually higher in neighborhoods with high crime rates.
Types of Homeowners Insurance
Homeowners insurance policies can be divided into four types: property damage, additional living expenses, personal liability, and medical coverage.
Property damage coverage pays for repairing or replacing the home’s physical structure as well as personal items contained within it. The standard plan covers a wide range of belongings; however, certain items that are hard to price, such as antique jewelry, may require additional coverage.
Additional living expenses are paid if your home is damaged and you need lodging elsewhere until the home is restored. This coverage includes paying for restaurant meals.
Personal liability covers bodily injuries from accidents that occur on your property. It might also cover certain other lawsuits such as libel or slander.
Medical coverage pays your bills for doctor visits, treatment, and therapy.
What’s Not Covered by Homeowners Insurance?
As with any insurance policy, a standard homeowners plan covers only up to certain limits. If bodily injury coverage, for example, is only $25,000 and the costs exceed that amount, you will have to pay the rest out of your own pocket. Nonetheless, you also have the option to raise your coverage limit, which will likely increase your monthly premium.
Standard plans usually don’t cover earthquakes, which requires extra coverage, regardless of the area’s history of seismic activity. Rates will be higher in areas with frequent tremors or earthquakes. Damage caused by neglecting regular maintenance or accidentally starting a fire is usually not covered in a standard plan.
How Much Homeowners Insurance Do You Need?
The amount of insurance you need as a homeowner comes down to three main factors: asset protection, lender requirements, and policy requirements.
Asset protection involves buying insurance to protect the value of your items so that coverage can pay for replacing them. So, if you own a large collection of assets, you need much more coverage than someone with minimal assets.
Lender requirements pertain to what your mortgage agreement states in terms of minimum insurance coverage, which is often the mortgage amount.
Policy requirements are based on your insurer’s view of coverage needs for the area, as some agencies require homeowners in flood planes to purchase flood insurance in addition to the standard policy.
Homeowners Insurance Deductibles
Deductibles are the amount of cash you pay upfront before your homeowners policy takes care of the rest. Deductibles can be adjusted to pay less in premiums and more upfront for a claim or the other way around.
Replacement Value Vs. Actual Cash Value
In the insurance dictionary, “replacement value” and “actual cash value” mean two different things.
Replacement value reflects the amount the insurance company gives you to rebuild or replace damaged elements of your home. This value is determined by what it would cost to replace existing insured items.
Actual cash value means the amount the insurer will give you based on what the item was worth before it was destroyed.
Make sure to ask your insurer more about this difference and how it relates to your policy.
How Much Does Homeowners Insurance Cost?
Different homeowners pay different insurance costs based on their lifestyles and financial situations. Generally, the more assets you own, the more you’ll pay in homeowners insurance. You’ll also pay more for insurance in high-risk areas, such as places with frequent accidents or on a flood plain.
When comparing homeowners insurance in Lubbock, it’s important to be aware of how policies can be elaborate yet not cover everything. You may add different types of coverage to your plan after discussing your needs with an experienced insurance professional. Googling “home insurance near me” is one way to start your search for a reputable insurance company. Contact our experts at Advanced Insurance Group to learn more about your homeowner’s insurance options. We are here to assist you with all of your home insurance coverage needs.