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The Basics of Buying Homeowner Insurance

Friday, September 19th, 2014

This is best done as soon as possible so your home is secure. If you do not acquire the right insurance, you could receive a rude awakening if your home were to be destroyed by fire or another natural disaster. Here’s how you acquire insurance:

1. Assess Your Home

The first step in the insurance-buying process is to provide details of your home to your Insurance broker.  Important information to record includes:

  • The year your house was built, square footage and construction material (such as type of shingles, siding etc)
  • Fire Protection i.e how far from a fire hall, are you hydrant protected or unprotected

You must present this information to your insurance broker so you can calculate the right rebuilding value.

2. Meet with a Broker

The insurance professional will help you calculate the rebuilding value of your home. Be aware that the replacement cost of your home may be different than what you paid for the home, due to the possibility of increased labor costs, debris removal, building codes, etc. This is separate from the resale value, which is the amount that would be paid if the house was sold.

Based on the characteristics of your home, the broker will help you choose the best homeowner insurance policy for your needs. You can also enhance your insurance in the following ways:

  • Sewer Back-Up: provides protection for losses that come from problems with a sewer, drain, eaves trough, septic tank, sump, or downspout.
  • Increased Liability: protects you from property damage or injury you may accidentally cause to someone else.
  • Floaters: Your homeowner insurance should cover the basic cost of your valuables if they were to be lost in a fire or theft. If you have valuable items that are worth more, you can enhance your insurance coverage to protect them.
  • Identity Theft: helps cover you in the event of someone committing fraud using your credit card, social insurance number, or driver’s license.

3. Inventory Your Belongings

In order to ensure your limits are adequate, make sure you have taken stock of all your belongings so you can get full coverage. Go room to room, recording everything you own. If you find that your belongings are worth significantly more than what your insurance policy would cover, talk to your broker about increasing limits.