Though all home insurance policies offer standard coverage including protection of your dwelling, items and other structures, what you need to be particular about when shopping for homeowners insurance coverage is:
• Replacement cost coverage
• Flood coverage
To ensure you have maximum property protection, you need to customize your insurance policy accordingly.
Let’s start with replacement cost coverage:
Replacement Cost Coverage
homeowners insurance coverage with replacement cost coverage is a good way to ensure peace of mind. This type of policy covers the total cost of your property damage.
For example, if your dwelling insurance limit is 400,000 dollars and your home gets destroyed, to rebuild your home all over again, this is the maximum amount you will receive from the insurance provider. This means if the rebuilding cost exceeds the insurance amount, you will have to pay it from your own pocket.
However, if you have replacement cost coverage, you can rebuild your home with ease. With this policy in hand, the total property loss will be covered by the insurance company.
Note, to qualify for replacement cost coverage you will have to insure your home to 80 percent at least.
If you take a look at the recent statistics presented by the National Insurance Flood Program, nearly two inches of flood water in a two thousand square feet home can cause a damage of about $21,000. This is a huge sum of money. The reason for stating this figure is to understand the importance of holding flood insurance coverage. Although home insurance policies do provide coverage against perils and natural calamities, usually flood damage coverage is excluded by many policy providers. Therefore, if your policy does not cover floods, then it’s wise to get an additional flood insurance policy. This is vital to ensure that your home is safe from flood damage.