Why Do I Need Quality Insurance Coverage For My Home

Why Do I Need Quality Insurance Coverage For My Home

Will I really need the best coverage I can get? What are the benefits of carrying good homeowner’s insurance coverage? There are questions that many people ask when buying a home for the first time, second or third time home buyers, and some individuals that have simply never carried homeowner’s insurance before.

My name is Nevin Shennett and I have been in the insurance industry for four years. For three of those years I have owned my own insurance agency. Throughout my time as an insurance agent a serious question I have often been asked is why do I need quality Insurance coverage for my home. There isn’t a simple answer to that question but there are some key things that should be kept in mind when considering this question.

Why do I need quality insurance coverage for my home?

First, you must determine what quality homeowner’s coverage is. There are many interpretations of what quality homeowner’s insurance can be and what needs it fills. These things can always change and are always subject to what is the most important to the insured and what is needed for that insured’s property. Homeowner’s insurance policies may vary widely from company to company as well as the coverages that may be found on the same type of policy from company to company may vary just as widely.

What most insurance agents would consider quality insurance coverage for your home would be a traditional homeowner’s policy. Traditional homeowner’s policies usually come with a few coverages that are standard however may have many caveats and exceptions that may be chosen or excluded. The most important parts of a traditional homeowner’s policy that are standard are that the home is insured for replacement cost, the repairs are insured at full cost, and that the home has loss of use coverage.

In terms of a traditional homeowner’s policy, “replacement cost” simply means that a home is insured for the amount of money the insurance company believes would be necessary to rebuild the home in brand new condition in the event severe damage were to be incurred by the home. “Full repair cost” is a coverage that can be chosen on most traditional homeowner’s policies that insures that the insurance company promises to pay whatever the full cost of the damages that occur to a home in the event of a loss is covered financially by the company and not by the insured.

The term “loss of use” is simply a way of stating exactly how much money the insurance company is willing to pay for food, clothing, and housing to an insured in the event of a total loss on the property were to occur. This is only in place until the property is completely repaired or rebuilt by the insurance company. This coverage is usually stated out as an exact amount that will be upheld by the insurance company in the event of a total loss.

These three generalizations of traditional homeowner’s policies are important to an insured because they are the coverages that will impact the insured’s life most in the event of a loss and the coverage that has been carried by the insured will come into play. An example of replacement cost in action would be an insured having a total lost and instead of rebuilding the home, the insurance company simply pay the insured 40% of what the home is worth on the market.

This would result in a horrible loss on investment for the homeowner.

In the event of damage to the property and the insured was not covered for full repair cost the insured would be stuck paying for the remainder of the repairs after the insurance company assesses the damage and pays what they are obligated to is fair for the repairs.

This could result in a huge bill for the insured. Loss of use is the simplest of these coverages that we have discussed that would adversely affect the insured. In the event of a total loss if this coverage was not included in the coverage that the insured received, there would be nothing available to assist the insured in their time of need while the home is being repaired.

All of these things could have adverse affects on any insured that fails to secure these coverages on any policy that is meant to protect their investment in their primary residence. These coverages are shining examples of why you need quality insurance coverage for your home.

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