If you’re like most people, when you think of homeowners insurance, the first thing that comes to mind is protection against damage from fire and theft. And while those are definitely two important factors to consider, your policy may not cover everything else you may not have thought about.
You may have other questions, like, Do you need flood insurance? Or, What happens if there’s a burglary in your home?
Never fear: We’ll take a look at all the add-ons available and how much they cost on average. So whether you’re looking to protect your home from floods or want extra coverage for your jewelry, read on.
The Different Types of Homeowners Insurance Policies
Did you know there is more than one type of homeowners insurance? Yes, there are different types of policies that cover different things for your unique home.
There are three primary types of homeowners insurance policies:
- All-risk policy: This policy is the most comprehensive, covering all possible risks except those specifically listed in the policy.
- Package policy: These policies combine both all-risk and peril-specific coverage into one policy.
- Peril-specific policy: This one covers only risks related to specific events, such as fire or theft.
Now that you know the types, let’s discuss how to pick the right one for you and your home.
How to Choose a Policy
Which type of policy is right for you depends on your needs and budget. If you want the most extensive coverage, go with an all-risk policy.
If you’re looking for a more affordable option, a package policy may be best for you. Even insurance can be a small luxury every homeowner should have. Talk to your insurance agent to find out more about each type of policy and decide which one is right for you.
A few things to consider when choosing include:
- The amount of coverage you need
- The risks that are specific to your area
- Your budget
For example, if you live in a flood zone, you’ll want to make sure you have flood insurance. Or if you have expensive jewelry, you may want to get extra coverage for that, too.
What does homeowners insurance cover?
Now that you know a little bit more about homeowners insurance, let’s discuss what it covers. Generally, policies cover damage to your home and its contents from certain risks, such as fire, theft, and vandalism. But there are also add-ons available that can provide extra coverage for specific events or items.
Another example that homeowners insurance can cover is damage to your home from a windstorm or other natural disasters. If you live in an area that’s prone to hurricanes or other severe storms, be sure to ask your agent about this type of coverage.
This add-on will protect your home and its contents from damage caused by high winds, which is one of the most common types of home and property damage.
There are a number of standard add-ons to a homeowners insurance policy, and each offers different levels of protection.
Here are some of the most common ones:
- Flood Insurance: Protects your home and belongings from damage caused by flooding
- Liability coverage: Protects you from financial damages if someone is injured or their property is damaged while on your property
- Medical payments coverage: Covers the medical expenses of anyone injured on your property, regardless of who is at fault
- Personal property endorsement: Provides extra coverage for your belongings in the event of theft or damage
- Replacement cost endorsement: Ensures that you will be reimbursed for the cost of replacing your belongings, regardless of their original value
- Scheduled personal property endorsement: This add-on covers specific high-value items, such as jewelry or art, for a specified amount
While you may not need all of these for your particular home, it’s important to consider them all just in case. You never know what could happen and having the right insurance add-on could be a lifesaver.
How much do these insurance add-ons cost on average?
The cost of homeowners insurance add-ons varies depending on the type of policy and the amount of coverage you need. However, on average, they range from around $25 to $200 per year.
It’s a good idea to contact different companies directly to make sure you’re getting the best rate that you possibly can find.
How can you save money on them?
One way to save money on homeowners insurance add-ons is to shop around for the best rates.
You can also get discounts if you buy multiple policies from the same insurer or if you have a good credit score. And finally, many insurers offer discounts if you install safety features in your home, such as a security system or fire alarm.
You can also save money by getting a higher deductible. This means that you’ll have to pay more out of pocket for any damage that occurs, but you’ll also be rewarded with lower premiums.
For example, a $500 deductible will probably save you around 10% on your premium, while a $1,000 deductible could save you 15%.
The bottom line is that homeowners insurance add-ons are a great way to protect yourself, your family, and your belongings. Be sure to talk to your agent about which ones make the most sense for you.
How to Make a Claim
If you need to make a claim, contact your insurance agent as soon as possible. They will help you file a claim and walk you through the process.
Be sure to have the following information handy:
- Your policy number
- The date and time of the incident
- The type of incident
- The extent of the damage
Having this basic information ready to go will make the process of filing a claim much smoother. This will ensure that you have all the information your agent needs to help you file a claim quickly and efficiently.
Now You Know More About Add-Ons
Homeowners insurance is a necessary evil for most people with mortgages. But it’s important to understand what it covers and what add-ons are available to you.
Whether it’s for flood, liability, or medical payment coverage, now you have more knowledge about which types of policies are available.
By knowing the basics and understanding your needs, you can select the policy that’s right for you. And if something does happen, be sure to contact your insurance agent as soon as possible to start the claim process.
Luke Williams writes and researches for the insurance comparison site, Clearsurance.com. His passions include insurance and helping others save money on premiums.