One of the last things that a lot of homebuyers think about when they're, getting ready to close on their home is their homeowner's insurance there. Nobody looking for the cheapest homeowners insurance just to make the liquor happy, they get the keys to their new home.
But how much do they really understand the impact of their homeowner's insurance decision? Let's, set you up for success because your home is so much more than just four walls on a roof. It's, your Kingdom, it's, your home.
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If you're new here, please go and subscribe to this channel now and like this article. Thank you all right. My friend, the reason this becomes increasingly important is to consider the fact of what is covered and what isn't covered.
Underneath your homeowner's insurance, what happens if something unfortunate happened to your property and your homeowners, insurance didn't cover it. How are you going to rebuild your home if it's completely demolished? How are you gonna be able to make the repair to your home if it wasn't covered or anything insurance? It has to come out of your pocket.
Unfortunately, a lot of us don't have hundreds of thousands of dollars in the bank that we can just plop down to make those repairs that are, where the power of home assurance comes into play. So let's.
Take a closer look at homeowners' insurance and please keep in mind that I'm, a trusted real estate adviser and not a homeowner's insurance agent. So when you have questions after today's, conversation please reach out to your insurance agents, ensure that you have the right coverage for you.
The first thing we need to understand is why you even need homeowners insurance. It really falls down into three main categories. The first one is to repair your home or actual structure being your actual house.
If that were absolutely demolished, or if it was leveled by a storm or burned to the ground, could you realistically afford to rebuild your home out of pocket? The second thing is to repair or replace personal belongings.
Now, this is an aspect that people don't always realize. But yes, your homers and strengths on a lot of cases will cover some of your contents, not only inside of your home but even when you're on the go talk to your insurance agent and take a look at your policies, see what's covered and what's not covered and that third one is a cover, your personal liabilities, yes, homeowners insurance does that to consider if you had a guest over and maybe they're one of those two happy people.
We've, all heard of these kinds of people before to if they are invited to a party. You're, opening up the teen of your domain to give love to those people that you've welcomed into your home and to share your abode with them.
Somebody slips they fall and then decide gonna see because they twisted a toenail yeah. It really is kind of like that. Sometimes, oh, it posted a toenail. I need $ 100,000. Really you didn't even break nothing but a toenail.
If that so I mean I'm kind of making light of that a little bit because it is absurd, but the reality is, it does happen, and I know that you've probably heard of this at some point in time. I do the news or from a family member or a friend, so it really does happen.
Let's, protect you and that's, one of the reasons for having your homeowners insurance and ensuring you have the right amount of coverages. The second thing is understanding what homeowners insurance covers and what it doesn't.
There are two main types of the homewares insurance policy. One of them is called an ho2 and what is called an ho3 important to note when we're talking about a Cho. What does that stand for homeowners, insurance right, pretty easy to remember, ho2 and ho3?
The ho2 policy is less comprehensive and it is often described as a named peril policy, which means that there is a list of named Paris. Let's. Take a closer look at the 16 perils that an ho2 policy will cover the first one.
Is fire lightning? The second one is the smoke. The third is theft. The fourth is vandalism. The fifth is wind storm and hell the sixth, this damage caused by vehicles kind of like. If someone flies off the freeway into your home yeah that would be covered.
The seventh is damage from aircraft. The eighth is from the weight of ice, snow, or sleet. The ninth is freezing of the household systems. The 10th is riots, the 11th are explosions, the 12th or following objects.
The 13th is volcanic eruptions, the 14th is an overflow and discharge of water. The 15th is damaged from an artificially generated electrical current and the 16th is a sudden tearing cracking or bulging of the home.
Now, when you want protection that goes beyond the ho2, that's when you move into the hero3 which covers all of those 16 and is often considered an open peril policy, which means that they cover up all perils, except for those otherwise notated by The insurer themselves, at the same time, your personal property, is still covered, underneath the named peril basis for the broadest amount of homeowner protection.
There is a policy called an ho5 that covers everything, the HOA in the HOA 3 cover, plus your home and your personal property for all occurrences, except for those specifically excluded by the insurer.
At the same time, you still may need specific insurance for things like a natural disaster. Such insurances include flooding, earthquakes, landslides, mold, infestations, wear and tear nuclear hazards, and inaction.
At the same time, in many cases, you can buy flood insurance and earthquake insurance as a separate policy and in hurricane-prone areas or tornado-prone areas. You may want to consider wind storm insurance talk to your insurance agent.
If you have specific weather-related concerns about your insurance policy that ensure that you have the right amount of coverage for you, the third thing to understand is the basic parts of a homeowner's insurance policy, a homeowner's.
Insurance policy is made up of several distinct categories. Some of these categories have come as a standard part of the policy itself, and some can be added on with the standard coverage policy. There are six broad categories that are covered.
The first one is what they call dwelling protection, the dwelling being your home insured. It covers the damage to your home and attached structures. Consider a garage here as an attached structure to your house.
The second is other structures, protection that covers standalone structures on your property like a fence or toolshed. The third thing covered is what is called additional living expenses. Now you may have heard of this coverage term as loss of use.
In short, this type of pasta helps you pay for any temporary housing expenses and basic living expenses. If you are forced to vacate your home underneath the cover loss of your homeowner's insurance policy, the fourth protection is personal property protection, meaning that personal property, that's inside your home.
A really quick way to know what personal property is from real property is that if it's attached to the property affixed to the property, it's, considered real property. If it's loose from that something like an appliance, something like a refrigerator, your couches, your televisions, dad is personal property.
The fifth is a liability coverage going back to that person that might slip and fall in the house and then come back to see you it'll help protect you if you were deemed responsible for the occurrence of that person slipping and the six Coverage are for medical payments.
If somebody is injured on your property, it'll pay for those medical expenses. If you were deemed liable for the cause of that harm to that person, and if you or your family caused an injury to another person away from the home, that policy will actually just kick in automatically, no matter who's, the fault.
Now there are four common optional coverages that consider their first kind is water backup coverage. Consider what happens when a pipe burst in your home, where you have a backup and causing a water issue inside your home.
This is where the water backup coverage would come into play. The second optional coverage is called enhanced dwelling protection. Essentially, what happens at the cost of construction that replaces your home goes up? You'll be protected.
If you have this kind of coverage, the third optional coverage you can have is for identity theft. The fourth optional coverage you can have is scheduled personal property endorsements. Now, this is for those high-end that you may have that exceed your standard limits of coverage, things that are like, maybe very fine, jewelry, or very fine art that cost a lot of money and exceeds the standard amount that you have for your personal property limits.
The fourth thing you need to know about homeowners insurance is to consider wisely the choice of the coverage and protection that you want, along with your limits and deductibles. Now the best person to have this conversation with will be your insurance agent.
If you haven't done so already, you should be reviewing your insurance coverages every single year to make sure that you have adequate coverage based upon any changes in your life or household effects, or situations at large.
It's. A very useful homeowner habit to adopt right away is to review your insurance policy with your insurance agent once a year. The fifth thing that understands is what's, called replacement, the cost versus actual cash value.
Now a lot of people hear the word cash and they get fixated on it. Thinking that's, we're gonna be the better policy, not exactly so when we're looking at replacement value. If your house were completely demolished and how to be rebuilt tomorrow, what would it cost to rebuild your house from the foundation, brick by brick, all the way back to its former glory, that's, the full replacement value of your house or oftentimes? Some people call it brick by brick replacement as opposed to what's called the actual cash value replacement, which bases the coverage on the depreciated value of your personal property in your residence.
So you can quickly see how Stork of a contrast. This makes sure that you're, getting the replacement coverage because that's. What's? Gon na help you rebuild if something goes wrong. The sixth thing that you want to do is understand your deductibles and how they work on your policy.
Please have an in-depth conversation with your insurance agent about the type of policy you choose and the options that you want to be covered. Have this conversation with them asking about the deductibles and make sure that you understand what's going on and where your protection is getting this right? I know it's, not always so fun to think about the bad things that could happen in life, but getting this right upfront will protect us into the future if you haven't done so lately.
Please talk to your insurance agent. The seventh thing is: how high should your deductibles be? Your deductible needs to be at an amount that you could realistically pay if you ever need that drawing your homeowner's insurance review your options with your homeowner's insurance agent to make sure that the ductile amount is comfortable to you.
The eighth thing to understand is what factors into the cost of homeowners insurance. Typically, a homeowner's insurance company will be looking at the following one: the rebuilding cost of your home to the age of your home.
The third one is the distance from your home to the nearest water source. The fourth is a fire protection rate for your city. The 5th is your homeowner's insurance claims, history, and also the homeowner's insurance claims of others in your neighborhood.
The sixth is your coverage limits and deductibles, and the seven things they'll take into consideration is whether consider recreational hazards or attractive nuisances. Consider something like a trampoline or a pool that will fall underneath this category.
Let's. Take a closer look at the eight types of homeowners, insurance, and nine tips for flying an insurance claim after a major disaster. Looking forward to our next conversation, we'll see you in a few