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Saving Money in the Long Run: Get the Right
Home Insurance
It is an exciting time becoming a new homeowner. However on top
of new ‘wonders’ like interest rates, mortgage payments, and a
family possibly, there is homeowners insurance to think about.
Although many feel that it is just a wash, and should acquire
normal homeowner insurance, there are other factors to account
for when deciding on what type of plan to purchase.
A basic homeowners’ insurance policy will cover four main
bases. First would be coverage for the structure of the home,
this takes care of the home in case it needs rebuilding [such
as if a fire were to burn down the house], covering the
disasters listed within the policy. Generally there will not be
coverage for flood, earthquake routine wear and tear, as there
are other separate plans to cover those. Of course, it is
important to plan accordingly, if you feel that there a chance
of hail, or fire damage, then make sure to put forth enough
money to rebuild in case of such an event. A second function of
standard homeowner insurance is the coverage of belongings
within the home. This also includes protection against stolen
items, such as jewelry, which should be appraised and insured
for its proper value if it is expensive.
The third and fourth functions of homeowners’ insurance deal
with liability coverage and additional living expenses [away
form home]. Liability coverage works to pay court fees and
advances for defending the homeowner’s family [or pets] against
damage done to another’s property or body. Generally a plan
will cover up to $100,000, yet with so many cases now exceeding
that, if one can afford it, it is a good idea to insure
liability higher, as a number exceeding that barrier can
completely cripple a family. The fourth clause will cover
expenses for homeowners when they are out of the home, due to a
covered disaster. Basic needs are covered [restaurant bills,
hotel rooms, living expenses], and depending on the policy can
range from 15% to unlimited, for a period of time which the
house is not inhabitable.
Now that the overview of insurance is through, it is important
to decide if other insurance is needed. It should be a
no-brainer. If one can afford it and lives in an area such as
the pacific coast, that other insurance is needed. Flood /
Hurricane, and earthquake damage can be devastating, yet in
most areas of the country, is not a threat. For young
homeowners who may be tight on the budget, it may be a good
idea to only dabble in these areas if it is a high-risk area in
which the house is located.
There really is a lot of work in being a young homeowner,
however as with most issues, proper knowledge can go a long way
in a successful ownership. Insurance is definitely an issue
that should not be made a snap decision, remember not every
case is the same, make sure not to fall into a general trap,
get a plan that is tailored to the house.
For most, analyzing ones bank account is never a fun task. The
ones who have a lot of money really have no need to do so, and
for the rest, well it is just a reminder that we either need to
put away more money or we have a long way to go before settling
down.
Being in that middle age it can be especially scary to look
down at the bottom line. However with that, a plan of action
should be made.
Too often in decision making a rational head is not effectively
used to see the best possible path. In this case, money often
drives people to unnecessary or drastic measures.
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