Life throws us curve balls. And when something as critical as your home is at stake, the experience can be financially devastating and emotionally overwhelming. Home insurance can ease the pain. But the array of coverable features to choose from can be daunting.
Start with plain vanilla coverage, then customize from there to meet your specific homeowner needs. And always understand what you’re buying. You don’t want to find yourself short on coverage should you need it. Keep in mind that banks will require you to take out homeowners insurance before issuing a mortgage on your home.
Cover the basics
Standard home insurance policies protect against interior and exterior damage caused by, for example, fire. But earthquakes and natural flooding are not usually covered, and require separate insurance. Theft or damage of personal belongings, and injury to a visitor, neighbor, or passer-by while on your property are also covered. The cost of living somewhere else while your home is being repaired is also pretty basic, but ask if your policy provides this coverage just to be certain.
Most home insurance covers dog bites and other Fido-related incidents. But it can cost you in the form of a higher premium. And some insurers won't cover muscular dogs that can inflict severe harm, such as Dobermans. Ditto for exotic pets, which tend to be wild and hard-to-control. (Thousands of big game cats are privately owned in the U.S. Really.) But what if your pet is atypical but domesticated (think horse or pig)? They may or may not be coverable, so ask your insurance provider.
Anticipate replacement-value caps
Home insurance replaces stolen or damaged belongings—to a point. So you may want to add a personal articles rider to your policy to additionally insure high-ticket items such as jewelry, furs, fine art, antiques, musical instruments, stamp/coin/comic collections, big-ticket electronics, and firearms. Each item should be fully described along with a value attested to by an expert appraiser and a photo, if possible. Although you’ll pay an extra premium for each of these items, their full value many still not be covered, in which case you may want to consider buying separate insurance for your Picasso.
Rethink that trampoline
What you consider a common backyard fixture, your insurance carrier may see as a likely trip to the emergency room (or worse). So if you want a trampoline or pool on your property, prepare for a premium increase. The good news is that the rapid increase in homes with trampolines has prompted more insurers to offer this coverage. As for pools, the exact cost of your policy will vary based on a variety of factors, including the type and location of the pool, and where you live.