Right Size, Right Coverage
Homeowners insurance isn’t a one-size-fits-all product; different types of property will require different types of insurance coverage. So when purchasing insurance, it’s important to think about what you might need at that moment as well as in the future.
Single Family Residence
If you own and reside in a single family home, you should have two types of insurance coverage:
- Fire & Lighting
- Smoke (Caused by fire)
- Frozen Plumbing
- The weight of Ice & Snow
In most cases, replacement and repair costs are determined by the current market costs. If you are concerned about having enough coverage, talk with your insurance provider about adding an extra 20 percent in dwelling coverage.
Protect your personal belongings with personal property protection. This ensures that your belongings are protected in the case of a catastrophic event (such as those mentioned above). Most insurance companies cover approximately 70 percent of the value of your home.
If the replacement value of your personal property exceeds your coverage – keep records of your treasured items. Digital records such as pictures and receipts of each item will help your insurance company properly process a claim.
Insurance coverage requirements will depend on state, lender and condo association requirements. In most cases, you’ll be required to purchase HO6 insurance which covers the inside of your unit. State laws and your condo association will dictate where your unit technically begins and ends – for some, your unit starts with the drywall, for others, it starts with the paint. Talk with your insurance agent and condo association to get the specifics on your unit.
For condo owners, personal property insurance can vary greatly and it’s best to review necessary coverage amounts with an insurance professional. As with a single family home, you’ll want to keep a record of all valuable personal belongings.
Tip: Love your ground floor condo? Then you may want to look into water backup coverage in case of a sewer or sub-pump back up.
Insurance coverage for a multi-family home will largely depend on whether or not you reside in one of the units:
If you reside in your multi-family home then dwelling replacement coverage is a necessity. As with a single family home, dwelling replacement will cover the cost to rebuild your home in case of catastrophic damage.
If you own a multi-family home but do not live in it, you’ll need a landlord protection policy. This policy protects you in case of damage, water, fire, and theft. This policy does not include normal wear and tear or damage due to lack of care.
As a landlord, did you know?
- Fair Rental Income Coverage covers lost rents up to one year.
- You can require tenants to purchase renters insurance; this shifts the liability over to the renter.
Want additional coverage?
If you are interested in additional coverage, talk with your insurance professional about roof replacement and flood insurance.
Bottom Line: Your home is also your investment; protect your home, your personal belongings and your lender with an up-to-date insurance policy.
Be sure and talk with your insurance professional and lender about the type and amount of coverage you’ll need.
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