If you own a home, it is very important to have homeowner’s insurance to protect your house. Mortgage Lenders often call this hazard insurance. Lenders require you buy a minimum level of homeowner’s insurance so you can rebuild your house if disaster strikes. Homeowner’s policies include insurance against fire and other hazards; these policies offer two main types of coverage: Liability coverage and Hazard insurance. Liability coverage protects you in the case that you’re sued due to an accident on your property. Hazard insurance includes coverage of damages from hazards often including fire, wind, vandalism, snow, and burst pipes. Hazard insurance includes both damage done to the building itself as well as your personal property, including furniture, clothes, etc.
Hazard coverage is important because it takes care of the recovery cost; rebuilding after a fire and trying to replace your possessions can be very costly. There are two types of coverage you can buy:
- Actual-value coverage: pays what your lost property was worth
- Replacement-value policy: covers the cost of replacing it
Most often your mortgage lender will want you to have a Replacement Value policy. Check with your lender before obtaining coverage. Having hazard coverage is important, but it is also important that you have enough coverage. Be sure to read your policy carefully to find out exactly what you have covered.
Some of these decision can be complex. Best way to navigate these waters is to work with a licensed independent insurance agent who can educate you on your options and help you obtain the best coverages at the right price. If you’d like to know more about Hazard insurance, we’d be happy to help. Feel free to reach us at www.keslarinsurance.com or 603-273-0953.