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Tips to Make Sure Your Home Insurance Covers Your Needs

Saturday, March 18, 2023

If the pipes in your wall burst and water started spraying everywhere, you’d probably immediately wonder about your homeowners insurance coverage. However, during an emergency is not the best time to consider your home insurance needs. We’re here to share some home insurance tips that will help you make sure you have enough coverage before you need it.

what home insurance covers

What Does Homeowners Insurance Cover?

Homeowners insurance is purchased by individuals who own homes and property. This type of policy generally provides broad coverage for the property including incidents that occur as well as damages to the home.

Homeowners Insurance Coverage Types

Depending on the type of property you have as well as your coverage needs, there are eight different types of homeowners insurance policies: HO-1 through HO-8, which HO-3 being the most common type of home insurance coverage followed by HO-5.

While there is no need to get too in the weeds about the similarities and differences between each (insurance agents will do that for you), know that there is one best policy for your home whether you have a modern, older, mobile, or rental property. It is important to speak with a trusted insurance agent who is experienced in home insurance to choose the best type of policy.

Tip 1: Do Not Underinsure

One of the most common home insurance mistakes is not having enough coverage. It’s important to have enough insurance coverage to rebuild your home and replace your possessions if they’re destroyed or stolen. In fact, insurance companies are aware of this issue. That is why they developed the 80-20 rule.

What is the 80-20 rule for home insurance? Most insurance companies require that you insure your home for at least 80% of the replacement cost. That being said, 100% coverage is better. This will prevent you from having to get an additional mortgage if your home is lost.

Tip 2: Review and Update Coverage

Time flies and things change. But not updating your home insurance coverage to keep up with those changes can spell disaster for your finances. You should review your coverage annually or whenever you make significant changes to your home or possessions. This can help ensure that they have adequate coverage in case of a disaster and that you aren’t the one left holding the bill.

What is the most important part of homeowners insurance? The level of coverage. You should avoid paying for more than you need while also avoiding undervaluing your home and property.

Tip 3: Get Enough Liability Coverage

Liability coverage is important to protect against lawsuits resulting from injuries or other damages that occur on your property. You should make sure you have enough liability coverage to protect your assets.

Are there any activities that are excluded from homeowners liability coverage? Policies may not cover incidents related to inherently risky items such as trampolines or pools. Consult your insurance policy for any coverage exclusions.

natural disaster coverage

Tip 4: Don’t Make Assumptions About Coverage

Do not assume that your homeowners insurance policy covers everything that could go wrong. For example, many policies may not cover damage from certain natural disasters, certain types of personal property, or even pests.

What is the most common damage to your home that insurance does not cover? Damage due to wear and tear and from large-scale disasters (like hurricanes or floods).

Tip 5: Understand the Policy

As a homeowner, you should read and understand your policy, including the terms, conditions, and exclusions. This can help prevent surprises and misunderstandings when it comes time to make a claim.

How can I maximize my homeowners insurance claim? Adhere to the terms and conditions of your policy. Make sure you are diligent in documenting before and after a claim and act quickly to resolve the issue before any more damage can occur.

Tip 6: Consider Additional Coverage Options

You may need to consider getting additional coverage options, such as flood insurance, earthquake insurance, or umbrella insurance, depending on your location and specific needs to prevent any insurance gaps.

flood coverage for home insurance

Tip 7: Shop With an Independent Insurance Agent

Unlike insurance agents who work for specific companies, independent insurance agents work with several companies so they can shop around for you to find the best coverage and price for your needs. At Independent Insurance Associates, we are proud to partner with some of the best insurance companies serving North and South Carolina to get your the best insurance at the best price.

If you’re ready to update your home insurance policy, we are here to help. Get a free quote or contact us today with any questions.