Homeowners insurance is an essential purchase that is often underestimated. Mortgage holders require borrowers to fully maintain their coverage while they pay off their loan, but this insurance is just as important for those who own their homes free and clear.

Of all the factors to consider when buying homeowner’s insurance, two of the most important are the amount of insurance on the home and what dangers you think could occur. It’s important to get the right insurance coverage for your specific needs, so that after a loss you’re not left with a claim check that’s not sufficient to meet your needs or no claim check at all.

Homeowners insurance typically covers a wide range of potential damages, such as fire, lightning, or windstorms, but it does not cover everything. For example, it doesn’t cover flooding, which is an often-overlooked threat to  some homes. During Hurricane Katrina, more than 40 percent of homes in New Orleans that were damaged by the storm lacked flood insurance. If you live near water, you may want to consider pursuing a flood coverage plan.

Other perils that the policy may not cover include mold infestations and gradual rotting of building components. Hot, humid summers like we enjoy here in the south can produce perfect conditions for these troublesome hazards. 

The amount of insurance and the scope of the coverage have a major impact on the policy’s cost, but another influential factor is the deductible amount. A ‘premium’ is how much you pay each month for your insurance policy, while a ‘deductible’ is how much you pay before your insurance kicks in when a claim is filed. A high deductible means a lower premium. Since homeowners often pay premiums for years without suffering a loss, the savings from the higher deductible discount may offset the higher out-of-pocket expense if a loss occurs. 

Homeowners insurance may seem like just another expense, but it is really a vital part of a homeowner’s financial plan. Take the time to make certain you have the right coverage at a reasonable cost.

If you have questions or would like to know more about how to  protect what matters, call us at the Earl Carney Insurance office in your area.

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