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How Much Homeowners Insurance Do I Need?

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Tuesday, April 7, 2015

How Much Homeowners Insurance Do I Need?

When Hurricane Katrina struck the Gulf Coast in 2006, property damages added up to $81 billion. It was the one of the worst natural disasters in U.S. history, and the most expensive catastrophe ever faced by the insurance industry.

But it doesn't take a Category 1 hurricane to inflict costly damage to your home. Think about the unpredictable weather we've had in just the last year: Snowpocalypse in the Northeast. Major flooding along the Mississippi. Wildfires in California. Tornadoes in the Midwest. In case your home gets damaged or destroyed by a natural disaster, would you have enough insurance to rebuild it from the ground up?

For most Americans, the answer is no. That's why you need extra homeowners insurance. Look to Insurance Clarity to compare the best policies in your area.

The Types Of Home Insurance You Really Need

You can't fight off Mother Nature, but you can protect your home from the destruction she causes. Here's a list of scenarios you might have as a homeowner, along with the types of home insurance policies you’ll need to handle them. Get the right homeowners insurance coverage, and you'll recover from whatever life throws your way.

In Case...

You have a mortgage.

You Need:

Standard coverage. Most banks won't even give you a loan until you have a homeowners insurance policy. So go for an HO3. It's the most popular home insurance option, and it covers all major damage to your home, to your personal belongings, and to other structures on your property.

In Case...

Someone gets injured on your property.

You Need:

Guest medical coverage. It pays for your guest's medical expenses in case they're accidentally injured in your home.

In Case...

That injured guest takes you to court. Or someone in your household damages someone else's property.

You Need:

Personal liability coverage. If you're held responsible for injuries or damages, liability coverage pays your legal fees. Personal liability and guest medical coverage are included in a typical homeowners insurance policy.

So protect your assets, and get home insurance today!

In Case...

You own pricey personal items.

You Need:

Extra personal property coverage. A typical HO3 covers about $1,500 worth of personal property. If you've got expensive jewelry, family heirlooms, artwork, and electronics, $1,500 isn't nearly enough. Insure each item separately through an added personal property policy. In case your most prized possessions get lost, stolen, or damaged, your insurer will pay to cover the cost to replace them.

In Case...

Disaster strikes.

You Need:

Hazard insurance. It pays for the cost of repairs after major natural disasters. Although hazard insurance is included in a typical homeowners policy, that policy coverage amount might not be enough.

So add more coverage! If you opt for extended replacement coverage, your insurer will pay 20 to 25% more than your policy limit. If you want even more protection, go for guaranteed replacement cost coverage. It guarantees to pay 100% of your repair or building costs, even if those expenses run much higher than your policy limit.

In Case...

You live in area at high risk for floods and earthquakes.

You Need:

An earthquake and flood policy. Your standard HO3 doesn't cover floods, earthquakes, or major storms (like hurricanes) that frequently devastate certain areas.

If you live in an area at risk for these natural disasters, protect your home with extra coverage.

In Case...

You have expensive hobbies.

You Need:

Equipment coverage. Insure your golf clubs, kayak, treadmill, camera, piano, guitar--even your yard, garden, and outdoor structures. In case your home gets burglarized or damaged, you won't want to pay the price of replacing your most expensive hobby gear.

In Case...

You run a business from home.

You Need:

Business property coverage. It protects your office equipment, products, and valuable property that you use to run your business.

In Case...

You rent instead of own.

You Need:

Renters insurance (HO4). It doesn't cover your building, since your landlord's insurance does that. But it covers your personal belongings in case they get damaged, lost, or stolen. Like standard home insurance, renters insurance also covers medical fees for anyone who gets injured in your home.

Shop Around For The Right Coverage

Standard homeowners insurance will protect you from most types of damage. However, if you have high-priced personal items or want to increase your policy limit, you'll have to add to what you already have. If you live in a high-risk area for natural disasters, you have to buy even more insurance.

To get a basic policy or bulk up your coverage, use Insurance Clarity. You'll get a free quote from insurers in your area, so you get the protection you need. Search for homeowners insurance right now!