When you buy a new house, there are many different streamlined processes involved.
Part of this is solidifying and understanding homeowner’s insurance.
Here, we will cover what is home insurance, how to understand your policy, and the do’s and don’ts of making a claim.
What is homeowner’s insurance?
This is the coverage you pay for yearly that will protect your home from unexpected events.
These events include things such are storms, fire, wind damage, injury on premises, and theft.
These plans are customizable and offer different amounts of coverage, just like auto insurance.
During closing, you will likely pay your yearly premium upfront as well as a set amount of monthly payments into an escrow account.
Homeowner’s insurance is not required by law, but your mortgage lender will likely require it to protect their investment.
The bare minimum, or the standard, that home insurers go by is that you need enough insurance to cover the cost of rebuilding the home.
And just like most medical insurance, you are also required to pay a deductible before your insurer starts paying. This amount can be a flat dollar amount or a percentage of the home’s insured value.
Making a claim
Unfortunately, disaster does strike. And, usually, at the worst of times.
Luckily, you have homeowner’s insurance on your side! Here are some tips and tricks for making the most out of your insurance claim:
DO: Take pictures and document everything. And do not stop at pictures. Take video footage of the damage as well. Smart phones are a great addition to the 20th century so utilize them!
If you had to pay for out of pocket expenses, save these receipts. These can include temporary repairs or alternate living quarters while damage was being assessed and repaired.
DON’T: When an incident occurs, you should report it immediately. Do not dilly-dally! Insurance claims are time sensitive. You can be held accountable for subsequent damage should you choose to not report in a timely fashion.
DO: Consult the experts. Your insurance adjuster, professional contractors, and building inspectors are your best friends during this time. If you are a bit lost on the process, contact the professionals at hand and they will do all the work for you.
DON’T: Try to fix the problem yourself for cheaper. If you hire an unlicensed handyman to do the job and they make things even worse, your insurance may not be able to step in after that.
We also highly encourage new homeowners to look into adding a home warranty! This is additional coverage for items and structures not included in your homeowner’s insurance. Think: windows, systems, and appliances.
