Mortgages and home insurance go hand in hand. If you are looking into buying a new home, it is important to be familiar with the basics of homeowners insurance so you know what you’re getting into.
Here are a few tips for helping you understand this type of insurance:
•Home insurance works much like other insurance, such as car insurance. You pay your insurance company a monthly premium, and your home will be covered if you experience damage or loss from natural disasters or theft.
•If you have to stay somewhere else temporarily during repairs, your policy should cover food and lodging costs.
•Most policies cover damage or loss caused by lightning, wind, fire, hail, theft, or vandalism. You’ll have to purchase a separate policy to cover damage from floods or earthquakes though. Most home insurance policies don’t include this type of coverage.
•A basic policy will also provide you with liability coverage. This covers you in case you’re faced with lawsuits for injuries that happen on your property.
•In addition, valuables such as jewelry may be covered. For example, if you lose your diamond bracelet and it is covered by your insurance, you can be reimbursed.
When shopping for homeowners insurance, be sure to ask about the types of coverage available, annual or monthly costs and any contingencies that may apply.