How to Choose the Right Coverage Limitations for your Home Insurance

Although home insurance is not legally mandated by your state like auto insurance is, it is important to know that it is a necessity not an option and many lenders will require you to have coverage if you carry a mortgage. Keep in mind that a policy can be customized in a myriad of ways, but traditional policies will cover damage to the interior or exterior of your home resulting from hurricanes, fires, vandalism, theft, lightning, and other covered incidents. Flood damage is usually not covered by homeowners insurance and requires a separate policy. In addition to the damage to your home inside and out, homeowners insurance also includes personal liability coverage for damage or injuries to a third party. For example, if your dog accidentally bits a neighbor and that person sustains injuries or homeowners insurance will help pay for their medical bills. Last but not least, the majority of policies will provide housing reimbursement if you cannot stay in your current property because it is being rebuilt or repaired due to a covered loss.

When choosing the type of coverage limitations, it is important to consider a few factors such as the likelihood of being sued by a third party because you have a safety hazard like a pool or dog, the total value of all your assets (investments, savings, retirement accounts, etc), and the market value for your home. 

At BenefitSource Insurance Services Inc in Aliso Viejo, CA we’ll walk you through all your insurance options and help you choose the coverage level that makes the most sense for you whether it is actual cash value, replacement cost, or extended replacement cost/value. Give us a call today to learn more.