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What to Know About Home Insurance
Home insurance which is also known as homeowners insurance is very important to all those that own or are planning on owning a home sometime in the future. This is not only because it is a necessity as it offers protection to your home and possessions against theft and damage but also because almost all mortgage companies will require borrowers to have it. These mortgage companies even refuse to give loans or offer to finance a home if one does not have proof of the home insurance. It is because of this that any homeowner must be aware of everything there is to know about home insurance. Home insurance also does not require a person to necessarily own their own home. Those people that are just renters can get the equivalent of home insurance in the form of renter’s insurance. Most landlords require their renters to maintain the renter’s insurance to cover them in case of any damage or theft. However, even if one is not required to have it by their landlord, it is still wise and advisable for a person to get this insurance.
Home insurance will generally cover the entire home. This means that whether the damage occurs inside or outside the home, the home insurance company will cover it. If harm should come to anything or anyone inside or outside the premises, the home insurance company will have to pay for any damages. Certain factors will determine the extent to which the home insurance company will cover for loss or damage. Among these factors is the value of the items damaged whether inside or outside the premises. Home insurance can also cover you in case of personal liability issues that could be brought upon you by a third party.
There are different types of homeowner’s coverage. There is actual cash value which covers the value of the house as well as the value of your belongings. This is after the cost of depreciation is deducted. The home insurance, therefore, covers you for the value of your possessions now and not what they were worth at the time you purchased them. The other type of home insurance is the replacement cost which is similar to the actual cash value except they do not deduct depreciation. This means that the home insurance company will compensate you for the full value of your possessions. This is the full amount you would need to repair or rebuild your premises or replace your possessions to the full original value. The final type of home insurance is the guaranteed or extended replacement cost. This type of home insurance is very comprehensive as it ignores the inflation that may have taken place over time. This means that the home insurance company will pay for everything it takes to repair or rebuild your home even if it is more than what your policy limit is. The guaranteed replacement cost is the advised home insurance policy as it covers you to the extent of the damage even if it is more than what your policy should cover. This ensures that your home is one hundred percent covered.

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