What You Should Consider for Home Insurance

What You Should Consider for Home Insurance

Buying a home for most people isn’t like buying a large appliance or a car. The price of a house can be several hundred thousand dollars, and homeownership can only be achieved through financing. Banks, credit unions, and lending companies offer loans called mortgages that allow buyers to make payments for an extended time period. One of the conditions of securing a mortgage is having a home or property insurance policy to protect the mortgagee’s investment. Here’s what you should consider when choosing a plan.

Selecting the Right Policy

Different homeowners will have different needs when it comes to an insurance plan. Consider these details when planning and shopping:

  • Coverage type: Will your insurance policy cover the depreciated value of your home (actual cash value) or the cost to replace your property and its contents (replacement cost)?
  • Premium vs deductible: How much can you afford to spend annually, semiannually, or monthly for the premium? A higher premium tends to come with a lower deductible and vice versa.
  • Location: Is your house in an area that’s prone to certain types of disasters? You may pay a higher premium, or have to purchase a separate policy for protection, such as flooding and earthquakes.

Protecting What Matters

Responsible homeownership isn’t just about maintenance and upkeep. It’s also about having the right coverage for your residence. It’s critical that you consider the various types of home insurance and find a policy that fits.