As a homeowner, having homeowners insurance is essential for your financial protection. You never know when something could happen, such as an earthquake, fire or flood that could leave you out of a home. Having homeowners insurance will protect you in these situations. However, many people don't understand the way their homeowners insurance protection truly works, which can leave many homeowners underinsured. Here are three things you may not know about your policy.
You May Not be Covered for the Replacement Value
One problem many people run into when their home has been completely damaged is that they only had coverage for the market value of their home. Since the market value of the home is constantly changing, there is a chance that this value is significantly lower than what the replacement cost of your home is. This means that if you need to rebuild your home completely because of a fire or other natural disaster, you may not be able to rebuild the home exactly as it was without paying out of pocket. Be sure to have an inspection done to your home so that you can determine the replacement value and ensure that your homeowners insurance protects you for this amount.
You May Not be Covered for Floods
When you purchase homeowners insurance, it's important that you go over everything that is covered with your homeowners insurance agent. Many basic homeowners insurance policies do not cover homeowners in the case of a flood, especially if they live in a high-risk flood area. If you live in a high-risk flood area, then adding additional flood coverage is definitely something to consider. It will raise your monthly premiums on the cost of the insurance, but it will be worth it if you ever have to deal with extensive flood damages in your home.
You Need to Ensure Protection
When you file a claim with your homeowners insurance, it doesn't mean that you are going to receive a check the very next day. You have to prove that your claim is true. To do this, you need to save receipts for repairs that you have paid for, you need to take pictures of the damages, and you need to file the claim right away. You can't wait months before filing a claim because there is much less of a chance that you are going to be covered.
When you know these three things about your homeowners insurance, such as Family Insurance Centers, you can be sure that you are utilizing it correctly and have the protection that you actually need from it.