It is about I post some basic information about Home/Hazard Insurance which every home owner should have to protect their valuable asset. Whether you’re a current homeowner or yet to be one, it is better to get some understanding about the home insurance. Like we get Auto insurance to protect our depreciating auto’s, it is important to have adequate insurance coverage to protect your residence and its contents. It’s equally important to protect yourself in case an accident on your property causes an injury and results in a personal liability suit. My clients always email me with questions like how much insurance should I get, how much is too much. Let’s look

1. What does a basic Home Insurance policy cover?
A basic Home Insurance policy covers damage caused by disasters such as fire, lightning and hurricanes. Under most basic policies your home is protected from:

• Fire and smoke damage
• Lightning damage
• Damage caused by windstorm or hail
• Damage due to vandalism, malicious mischief, or theft
• Damage from vehicles and aircraft
• Explosions
• Damage caused by a riot or civil commotion
• Glass breakage
• Volcanic eruption
• Personal liability (limits depend on the policy)

2. What’s basic Home Insurance policy doesn’t cover?
While a basic policy covers the cost of repairing the damage caused by a disaster such as a fire or storm, it does not include coverage for earthquakes or flooding. Earthquake coverage is sometimes available in the form of an endorsement to a basic policy – make sure to ask your agent. The federal government’s National Flood Insurance Program (NFIP) provides flood protection. Always purchase enough flood insurance for both your home and its contents.

You can visit floodsmart.gov and check whether you are in high/low risk flood area and make the decision accordingly. You can also go to “Homeowners and Renters” at the FEMA website and get more information. There is a 30-day waiting period for an NFIP policy to go into effect.

3. How do I determine how much coverage I need for a basic policy?
It’s important to have enough coverage to replace your home and its contents in the event of an insured loss. Since we can’t predict the future, it is difficult to know exactly what this cost will be. Correctly estimating this amount is critical.

Calculating the cost of replacing your home:
Start your estimate by multiplying the square footage of your home by the standard construction cost of $100 – $125 per square foot. The cost of rebuilding a custom home will be higher.

Covering the cost of replacing the contents of your home: Taking an inventory of the contents of your home is the best way to determine its replacement cost. You never know when you’ll need to file a claim under your policy, but you’ll be prepared if you complete a home inventory checklist. Take pictures of the property inventoried to accompany your list. Cell phone pictures work fine, and it’s important to keep your checklist up-to-date. Whenever you purchase something that’s kept in you home, add it to your list.

Know your stuff is a free software provided by the Insurance Information Institute for completing a home inventory. The software makes it easy to create your home inventory and includes free, secure online storage that gives you access to your inventory anywhere, at any time, making it easy to keep it up-to-date. They also have an app for it which you can download and upload documents via smart phones which would much easier. Some credit unions and banks also provide a online file storage where you can store important files and pictures like vault. Check out your bank website and you will surprised.

Hope this information helps you to shed some light about insurance which protects your great asset from nature disasters and man-made ones.

About Vijaianand Thirnageswaram

I am a Proud Realtor of Texas, trying to guide and help clients to find their dream home and educate them to buy them for right price. I am also a Candidate for CFP who has more financial knowledge which allows me share and educate clients in any financial decision making process.

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