our house is probably one of your biggest investments and one of your biggest responsibilities, so protecting it should be a priority. Homeowners insurance does just that. Not only does it cover your home and belongings from crazy unknowns, but it also helps you rebuild your home and life in the event as a total loss.
Think of your policy like a puzzle. It’s a pretty easy one, just four pieces, your home structure, your stuff inside liability protection, and additional living expenses. Now let’s back up a bit and break that down.
For most policies coverage for your home needs, you’ll get money to repair or rebuild your house if it’s damaged or destroyed by natural disasters, or by the animalism.
What’s not covered?
- Appliances that we’re out like your boiler or air conditioner
- Potential hazards like asbestos and mold
- Damages from floods and earthquakes
- The nuclear accident
- Mudslides, and more. Basically, read your policy.
For flood insurance expect to pay an extra $700/year or so, for earthquakes an average of $300/year unless you live in California and have to shell out thousands.
2. Stuff Inside
Now, what about your stuff? Your policy can assist you to replace furniture, other personal items like clothes, shoes, and your bags if they’re stolen or destroyed. How much will it cover? Whatever your home structure is insured for, let’s say 300.000, divides that by half, and that’s roughly how much you’ll get to replace your belonging.
3. Liability Protection
Next up, liability.
This part of your policy covers you against things likes:
- Expenses for injuries
- Property damage likes falling trees or home accidents
- Damage caused by your pets like dog bites
You typically start with $100,000 worth of protection. Need more than that? You’ll have to pay more.
4. Additional Living Expenses
Last but not least, additional living expenses. If you can’t live in your home because if damaged by a disaster, you can be reimbursed for your hotel. So how much does all this coverage cost? pull out your calculators with me. Take your home’s value, the average cost of one in u.s. is around 300,000 divided by 1,000 and then multiply that by 3,50. With this equation, you should expect to pay around a thousand bucks a year.
But remember, not all homes are created equal.
The cost for your policy will depend on factors likes:
- The size
- Type of your house
- You house location or Where you live
- And even personal factor things like if you’re a smoker
They can all affect what you’d pay. So there you have it, and when it comes to home insurance. You can say, “Now I get it”.
Spring is a popular time to make those upgrades and updates to your home, but is your insurance policy up to date? I suggested insurance companies like State Farm, Allstate, and Amica insurance. They have some advice to keep your home investment safe.
Reach out to your insurance company when you update your home. For example, if you recently updated your kitchen you want to be sure you’re fully covered, for the increased value of your home. You’ll have peace of mind knowing you’re fully protected. The cost increase to your existing policy should be minimal. And make sure your home insurance policy covers your plan changes.