If you own a home or are thinking about buying one, home insurance is probably something you’ve thought about at least a little bit. But if you’re like most people, the particulars of various insurance policies tend to bleed together into an incomprehensible mishmash of policies and coverages. Maybe you looked at the pricetag and little else. And while many home insurance policies are similar, there are notable differences from agreement to agreement, some of which may make a huge difference in your life if the worst happens. Here are some things to consider before you sign up, or if you’re thinking about switching insurers.
- Pay Attention to What is Covered (Natural Disasters). Houses take a beating in the best of circumstances. If you’ve been a renter, you probably haven’t had to worry about this too much, since your landlord was the one covering these bills. But now that you’re the one writing the checks, the reality of household damage hits a lot closer to…well…home. When it comes to damage resulting from natural causes, most home insurance policies cover wind, fire, hail, and lightning damage. With the exception of fire, these causes do not typically result in anything more than a limited damage to a home’s exterior. In some cases, hurricanes, tornadoes, and household conflagrations can level a house, and have your insurer covering a big claim. But don’t simply assume that whatever fate may befall your home will be covered by your insurance. Some events, like floods and earthquakes, are often absent from your insurance’s coverage list. So if you live in a floodplain or along a fault line, it will be in your best interest to either invest in expensive insurance that covers these eventualities, or just buy cheap and hope for the best. Don’t take it for granted that the other standard coverages are available in every home insurance package, either. Like those living in flood-prone areas, coverage for wind damage may be more costly if you live in an area with a history of tornadoes or other gusty acts of God. Think carefully about what natural disasters are likely to occur in your geographic area, and make sure they’re covered in your home insurance policy.
- Pay Attention to What Else is Covered (Human Mischief). I’m talking here about burglary and vandalism. Having someone break into your home is somewhat unlikely, but you want to be prepared well in advance. Don’t stop at picking an insurance provider who covers home invasion. Make sure you know exactly how much coverage you have. If you have valuables in your home, gear, heirlooms, or anything else that would result in a great net loss of wealth, consider purchasing additional coverage to make sure you have what you need. Vandalism is a bit easier to quantify, and is typically treated like the damage incurred from natural disasters, but it still pays to know exactly how much coverage you have in the event that your home is vandalised.
When you read the fine print to find this information, you’ll start to see the difference between prospective home insurance policies. Take some time to review prospective policies for a future home, or to replace an unsatisfactory policy that you have now.