A natural disaster or burglary could result in damage to your home, temporary displacement from your residence, or a loss of personal possessions. Evaluate your home insurance policy, to determine if you have adequate coverage or if you need to modify your policy.
Understand Your Policy
If you have a mortgage on your home, your lender may require that you carry a minimum amount of liability and dwelling coverage. This coverage protects your investment and prevents the lender from financial loss.
If you do not have a mortgage, you are free to purchase a homeowners' policy that is suited for your needs, but you will not be required to keep it or increase the amount of coverage. Dwelling coverage, personal property coverage, liability coverage, and additional living expenses make up a standard homeowners' policy. Each sub-category that is included in a policy can be increased or decreased based on your particular needs.
Consider The Risks
Unforeseen events that could result in damage to your home or possessions include natural disasters and theft. A party who does not reside with you could potentially get injured at your home. This could result in a lawsuit that may be costly.
Consider the area where you reside. If heavy winds and ice storms persist throughout the winter, you may want to increase your dwelling coverage. If crime rates are high and you live in a populated area, you may want to increase your dwelling and personal property coverage. Contemplate how you use your residence. If you have many people coming to your home on a routine basis or if you have many pets who spend time indoors and outdoors, increasing your liability coverage will protect you if someone is injured on your property.
Your entire coverage amount should supply you with enough funds to repair your home, replace the items that you currently own, pay for any injuries or damages that another person incurs while on your property, and pay for temporary housing.
Add Other Coverage
Homeowners' insurance does not cover some weather-related patterns or incidents that could result in damage. Floods, earthquakes, pest infestations, mold growth, and sewer backups may not be included in your policy. Some potential problems can be prevented with routine maintenance. If you have a concern about floods or earthquakes, speak to your insurance agent about it. You can purchase a separate policy that provides adequate coverage for the items that you are apprehensive about.