Building a place to call home takes years of hard work and dedication. Whether you rent or own, the place you settle at the end of each day is a testament to your continued commitment. If something happens, you don’t want to have to start over. By carrying enough coverage on a Renters or Homeowners Insurance policy, you can safeguard your investment and protect your future.
Renters Insurance with the Right Coverage
Renting a home does save you some of the heftier expenses, like appliances and structural repairs, but it doesn’t come without its share of risk. As a tenant, you can still accidentally cause damages or injuries to others. Accidents happen all too often, which is why carrying sufficient Liability Insurance on your Renters policy is so important. This coverage protects you if someone gets hurt or you accidentally cause damage to someone’s stuff, including the home you are renting. Common examples of this include your dog getting out and biting someone, unintentional fire damage in your kitchen, or your mower flinging rocks through your neighbor’s window. There are many more scenarios where your Liability coverage can come in handy, so make sure you carry enough to properly protect yourself.
The other primary purpose of Renters Insurance is covering your belongings. Over the years, you have likely accumulated quite a bit of furniture, electronics, dishware, and even clothing. If these items are accidentally damaged or stolen, then you can be reimbursed for their value. There are two ways that items are covered on a Renters Insurance policy: Actual Cash Value and Replacement Cost. Actual Cash Value accounts for the age of the item and factors depreciation in before paying out on the loss. With Replacement Cost, your items can be replaced based on the cost of the item brand-new. Depending on how you want to be covered, you will want to check very carefully what your Renters Insurance provides.
Many landlords like to see that you have Renters Insurance to cover accidental damages, but even if they don’t, it is still a great idea to have this policy for yourself. By reviewing your current lifestyle and assets, you can carry enough coverage to properly protect yourself and your belongings.
Protect Your Investment with Homeowners Insurance
Buying a home is a huge milestone, and you want to make sure your house is properly covered. Homeowners Insurance is a common requirement for mortgage lenders, but you still want to know what you are covered for and make sure it fits your needs. Home Insurance is designed first and foremost to cover your house in the event it is damaged or destroyed. The primary coverages are the Dwelling coverage, Separate Structures coverage, Personal Property coverage, and Liability coverage.
The Dwelling amount is the amount it would cost to fully rebuild the home if it was completely destroyed. It is typically calculated based on the house’s square footage, age it was built, and the materials used when it was constructed or remodeled. When it comes to your Homeowners Insurance, you want to make sure you have Replacement Cost coverage so the payout fully covers new materials. In some cases, the age of the home or other circumstances may require you to cover it as Actual Cash Value, which is why it is a good idea to get insurance quotes for any homes you are considering purchasing. Inspections help determine how the home is constructed and how it will be covered, so getting ahead of this in the buying process will really help you avoid getting caught in a situation where you have gaps in your coverage.
Once the Dwelling amount is determined, the other coverages are calculated as a percentage of this coverage. Usually, Separate Structures are covered at 10% and Personal Property is covered between 40% and 75% depending on the company. For example, if a home has a Dwelling coverage of $100,000, your Separate Structure limit may default to $10,000 and your Personal Property coverage may default somewhere between $40,000 and $75,000. Depending on your property and lifestyle, this coverage may or may not be sufficient. If you have a detached 3-car garage or a wood shop, you may need to opt for higher coverage than the default Separate Structures limit to properly cover them if they were destroyed. Personal Property may also need to be adjusted if you find you have expensive furniture, extensive cookware sets, or extravagant home theater systems.
No home is exactly alike, so it is important to review your house with your insurance agent to really make sure you are properly protected. This will help ensure your investment is covered.
Review Homeowners and Renters Insurance Options with Nicholson & Associates
Whether you have been a long-time renter or are on the market for your forever home, Nicholson & Associates can help you find the right insurance coverage for you. Contact your local agency to speak with a licensed personal lines agent and get covered today.
