Shopping for homeowners insurance may not be a fun part of buying a home, but it is important just the same. Unfortunately, few people understand enough about homeowners insurance to know where to begin. Use this quick checklist when speaking with your homeowners insurance agency to make sure you purchase the coverage needed to protect your home and family:
1. Do I have enough coverage? This can be a big problem especially for those who live in areas experiencing rapid appreciation in the local real estate market. Every few years it is a good idea to make sure your insurance will cover the cost of rebuilding your home. Be sure to ask about guaranteed replacement cost which will automatically provide coverage up to a specified amount should the price of materials, labor and supplies increase before you are able to update your policy.
2. What is included or excluded? Most standard homeowners insurance rates do not include the cost of flood insurance, earthquake, small business liability operated out of your home and other miscellaneous considerations. Be sure to speak to your insurance agent about any special or unique considerations.
3. Does the insurance cover the cost of bringing a building up to code? Building codes change and the cost of rebuilding or repairing can often exceed the original estimates if a new code has gone into effect since the home was built.
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