What to Look for In A Homeowner’s Insurance Policy

In order to purchase a home using a mortgage lender, most buyers will need to purchase a homeowner’s insurance policy.  This protects the bank/lender in the event of a catastrophic loss of value on the home.

The fastest way to discover what’s covered by your homeowner insurance is by reading through the terms page of your insurance policy. I have listed some guidelines below to help you determine what to look for as you read your policy and to help you ask better questions of your insurance agent when you go to buy a policy.

What is protected under a standard homeowners plan?
• Your dwelling and any detached buildings on the premises.
• Most furnishings, home appliances, consumer electronics and equipment.
• Liability as well as medical costs for accidental injuries and property damage for which you are responsible, up to your plan limitations.
• Limited living expenses if you are forced to vacate your home because of damage.

The things that may not be included:
• The replacement cost of your home and personal property, versus its actual cash value.
• Jewelry, memorabilia, weapons and other high-priced items in excess of specific limitations, generally $1,000 to $2,500.
• Business equipment, including personal computers used for work, in excess of particular limitations, typically $2,500.
• Sewer or drain backups.
• Liability protection with regard to swimming pools, trampolines and other high-risk items.
• Mold.

What is not included:
• Cracks or settling in the foundation.
• Neglect, wear and tear or deliberate destruction.
• Flood or earthquake damages. Protection for both is available separately.
• Landslide or other earth activity.
• War or nuclear explosion.
• Pest destruction.
• Pet destruction.

10 special discounts to ask for:
• Multi-policy (property, vehicle or more with the same firm).
• Smoke detectors.
• Fire extinguishers as well as sprinkler systems.
• Burglar and fire alarm systems which call at an outside support.
• Deadbolt locks and fire-safe windowpane grates.
• 55 years old and retired.
• Longtime insurance policy holder.
• Upgrades to plumbing, heating system and electrical systems.
• Earthquake retrofitting.
• Wind-resistant window shutters.

As a REALTOR in Central New Jersey I work with many insurance agents who offer a wide range of policies.  If you would like an introduction to the people I work with please give me a call at 732-302-1771 or send an email to mike@mikedowner.com and I will send you the list.