The last post was about auto insurance. It reminded me that many people don’t know much about their home owner’s insurance either. Relatively speaking, it is not as complicated as other insurances. With that being said, there is one important thing to remember.
Make sure that your home owner’s insurance is a Replacement Value policy. This means that if your house were to be completely destroyed, the insurance company will pay the entire amount needed (minus the deductible of course) to rebuild the house. You want to avoid a policy that covers the current value plus 20% for example. If the house value increases 30 to 40% in the meantime, you will have to pay the difference. Getting a policy that covers full replacement makes in much less complicated and much less stressful.
Another quick note: make sure to check what “Acts of God” are covered. You don’t want to have your house destroyed by a hurricane only to find out that it wasn’t covered.
I know it can be intimidating to discuss this stuff with your agent. But don’t be afraid to ask! Especially with your home, failing to ask any questions could cost you tens, if not, hundreds of thousands of dollars.
Photo Source: Vissago