Understanding What Your Homeowners Insurance Covers
If you own your own home, you have to have insurance on it if it is still financed or has a mortgage on it. The bank will not give you a mortgage on the home if you do not agree to keep it covered for the term of the loan. The insurance is the only way the bank can be sure to get their money back if something happens to the house. But what does that include?
Basic Insurance
When you start getting quotes for home insurance, you may find a trend. Most policies do not cover more than fire, theft, and some personal injury benefits. If you live in a flood zone, you will need a special policy for that, and in tornado-prone areas, you may have to add a rider to your insurance policy. You should check with your insurance agent for an explanation as to what is covered and what is not. You might be surprised.
Deciding Who To Buy Insurance From
There are so many insurance companies offer so many types of coverage it can be very hard to know where to get your insurance from. The problem is, they all offer low rates and talk about customers getting the best treatment that it is hard to know who to believe. The first place to check is with family or friends that have used the insurance company before. Ask them about their experience with the company and how the pricing was. This is a good way to get a feel for the company without having to spend money yet. Online reviews may also be the source of information. Most people that leave reviews online are not shy about sharing their experience no matter what it was like.
Flood Insurance
You can buy flood insurance from the Federal Emergency Management Agency (FEMA), but while there was the only source for a while, there are now some third party agencies selling flood insurance. The amount of coverage needed is determined by the flood zone that you live in. Some zones are very large, and some are rather small, but the size of the area is not what is important. What is important is the amount of flooding recorded on a yearly basis and the likelihood that the area will flood again. There is a lot of historical information that is used to determine the flood zones, and for the most part, they are pretty accurate. If you are at a higher risk, you will have a higher premium
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