If you’ve been a renter for most of your adult life and you recently bought a home, making the switch from a renter’s policy to a homeowner’s insurance policy may seem daunting. Now it’s about more than just your possessions — if something breaks or goes awry in your home, it’s totally up to you to fix it … but will your homeowner’s insurance help bail you out?
When doing your research there are some important things to keep in mind. If you’re currently shopping around for a homeowner’s policy that’s right for you, be sure to check on the following points to see if they’re included:
1. Are all of your possessions covered, and under what circumstances?
The whole point of having homeowner’s insurance is to safeguard your possessions and your overall home from certain environmental hazards and vandalism so that if something were to happen, you aren’t held liable for replacing everything at full value. In actuality, though, your homeowner’s policy will come with certain restrictions and stipulations in terms of what they’ll cover you for. For example, most common policies should cover you for any damage to either your possessions or your property in events like storms, fire, theft or vandalism. Get all the details on what events your policy will cover you for before signing up. A good policy should also provide you with shelter costs in the case of an emergency as well, so if you are temporarily displaced from your home because of a flood or fire, the insurance should foot the cost of a hotel bill.
2. What isn’t covered?
It’s fine and dandy to listen to a list of hazards for which your possessions are covered, but it’s always a good idea to keep in mind some of the environmental hazards that might be missing from your policy list. For example, depending on where you live in the country your policy might cover you for windstorms, but if your area is prone to tornadoes, you might consider paying for some additional coverage to be sure you’re safe. On the flip side, some companies actually exclude tornadoes and hurricanes from policies in high-risk areas, so you’ll definitely want to be sure you know the details of what your policy does and doesn’t cover as it relates to the typical weather in your area. Water damage is another big one to check in on. Do your research to find out if flood damage or earthquakes, etc., are common in your area, then make sure your policy has you covered (it typically isn’t) and check to see if additional coverage in this area might benefit you, as well.
3. What is the liability coverage like?
As a homeowner, you’ll also be responsible should someone injure themselves on your property and decide to sue. Check with your homeowner’s policy to make sure you’re being provided with liability coverage in case this happens to you.
4. What happens when your possessions are traveling?
Just because your policy is a homeowner’s policy doesn’t mean that you stuff should necessarily always be in your home to be covered. Whether it’s an item that was stolen from your car or a laptop bag that was lost in transit, find out if your policy covers your items when they’re outside of your home, as well.
5. Beware of bugs and infestations
You’d be hard-pressed to find a homeowner’s policy that covers things like bedbugs and termites, since most companies just consider dealing with this type of thing par for the course of owning a house. There’s really not much to be done about it, other than to recognize that these things aren’t covered, and to start saving up in a separate savings account for any household things that might go wrong that you’ll have to pay for out of pocket.