Typical Homeowners insurance policy has two main sections. Section 1 includes the property of the insured and Section 2 includes the personal liability coverage that needs to be insured.

At times, lender might require homeowner’s insurance as part of requirement in obtaining a mortgage. While buying home insurance policy one has to keep certain important things in mind. One needs the best level of protection as well as the provisions for valuables like jewelry, computer equipment, kitchen appliances and other possessions. In order to have adequate home insurance coverage one must check with agent or home insurance company beforehand to be sure of the adequate coverage instead of relying on the coverage mandated by the bank or mortgage company. Those levels are for protecting the house only and eventually skip the protection of possessions.

While applying for home insurance the insurance company needs to know about your present occupation, employment history, marital status, date of birth and social security number. The insurer needs to check the credit criminal and insurance history. Insurance claims of past is also checked by the home insurance company. The decision to chose a specific type of homeowner’s policy, deductible and how to pay for the coverage depends upon the homeowner.

There is exception to destructions like flood, earthquake and poor maintenance of house. Home insurance is needed and most lending institutions will require the homeowners to acquire a certain amount of coverage before issuing a loan to purchase property. The lender has a vested interest in property and wants to ensure financial compensation in the event of disaster. Homeowners may suffer a default of loan if they fail to carry the level of coverage needed.

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A primary part of your homeowner’s policy is for the homes structure. It would often cost more to rebuild the home than what the homes appraised value is. I suggest getting a policy with a coverage amount of the rebuild cost, or the appraised value, whichever is higher. Most insurance companies have software that can calculate the rebuilt estimated amount. Next you should make sure the policy has sufficient coverage for any other structures such as a detached garage, storage shed, swimming pool, etc.

There will be a separate limit listed on your policy for personal property. Make sure the limit is enough for what you own. Your agent should also explain how a loss would be paid. The best coverage is where your property would be covered for what it will cost to purchase new goods of equal quality. Some types of personal property have sub limits. For example you may have a personal property limit of $75,000 with a sub limit of $1,000 for computers. If the sub limit is too low you may be able to increase that sub limit at additional cost. Other sub limit examples could be guns, jewelry, currency, paintings, etc…

The personal liability portion of your policy protects you from loss for injuries to others. For example if a guest slips and falls on a wet floor or your pet bites someone. Your agent should explain exactly what is covered and what your limit options are. Typically you might get $300,000 in coverage with the option to increase to $500,000 at a small additional cost.

There are other elements to a policy. I suggest taking some time to compare policies from a couple different companies. Your state insurance regulatory department may have information to help you shop. The least expensive plan may not be the best buy! Make sure your coverage meets your needs and that your agent carefully explains the details. In many cases you will save by getting your auto and homeowners insurance from the same company. You can usually save on the premium by going with a higher deductible. Ask your agent to give you information on the cost with different deductibles. Note that your mortgage lender may have rules about the coverage and deductible for your policy.

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1. Get several quotes. Because there are so many companies out there you should talk to an agent and get some quotes from each company. An agent should be able to answer all of your questions about the types of coverage you can get.

2. Pay yearly. If you pay all at once you usually get a discount, much like car insurance. If you can choose a company you already have insurance with (such as car insurance) you might get a discount for having two types of coverage with them.

3. Document your household inventory. If something should ever happen such as a fire, flood, or other act of god you should have an inventory of the things you had in your home. Include as many of your belongs as possible, and update often.

4. Check for new rates and any possible changes at least once a year. There are several things that could change and make a difference to your yearly rates. For instance you might get a new dog, think of getting a swimming pool, or inherit some antiques or jewelry. You would want these extra things to be added onto your policy in case anything happens.

5. Be safe. Home insurance companies like it when people have security systems in place, and if possible a sprinkler system. Both of these would help cover you greatly from things such as theft and fire. The results of having these in place could dramatically cut your yearly rates, even if they do cost a lot to install.

On top of all of these things where your home is located is going to make a HUGE difference in your premiums. Think of places where they often have hurricanes or other natural disasters. The people in these areas usually pay a high premium because of the increased chance something will happen.

Additionally if you live close to water you will have to get flood insurance. Flood insurance covers your home in case you get water in your basement or if you have other water damage. Although flood insurance in pretty expensive some places you will be better off getting it because of how insurance companies view water damage. For instance many homes that got damage from Hurricane Katrina a few years ago did not have flood insurance, and while they were covered for the hurricane and wind damage, the water that came with the hurricane flooded the homes and for many this wasn’t covered.

With home insurance it is always a better idea to use an agent but also talk to the company directly to know for certain any information you need. Both the company and the agent should give you the same information but this isn’t always the case, so if you have any questions contact the company directly if the questions are specific to your policy.

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