It is easy to get tunnel vision when looking for homeowners insurance quotes. Sometimes, in the midst of many quotes and hours spent looking for policies, shoppers can resort to simply narrowing their selection down to price and choosing the cheapest quote rather than considering the actual value of the policies they are considering buying compared to all the other policies they have looked at. But doing so isn’t the best way to make sure you are getting the best and most affordable policy to actually fit the individual needs of your home and your family. Instead you must evaluate all aspects of the policy, from coverage to deductibles, and the cost in order to get the best deal. Here is a list of items you should review before you commit.
- Dwelling amount: The amount of the dwelling coverage is the amount you would get for the actual structure of your home. This includes the building that you consider your home and any other attached structure—like an attached garage.
- Contents amount: The actual structure of your home isn’t the only part of your property with value. The items you fill your home with are also valuable, both financially and emotionally. Contents coverage is what you are insured for on damages to your possessions like your furniture, electronics, clothing, etc.
- Loss of use: If your home were damaged in an insurable event and you were not able to live in it until repairs were completed, how would you pay for temporary housing? Loss of use in a homeowners insurance policy pays a reasonable amount for temporary living arrangements.
- Covered perils: Perils are the potential insurable events that could occur and that are covered under your policy. The fewer covered perils your policy has, the fewer insurable incidents you actually have coverage for.
- Calculation of home value: Insurance adjusters help insurance companies determine just how much damage was done to the property in question and how much they should pay you for that damage. In your homeowners insurance policy you will find that the company either determines your home value for damages by using replacement value or actual cash value. Actual cash value takes into consideration the value of your individual home before the incident. The goal here is to make you as whole as you were before the insurable incident. Replacement value gives you enough to replace your home without considering the depreciation. That means you may get enough to buy a comparable home, even if your individual house was not worth the same amount.