One of the most important steps of the home buying process involves making sure your new investment is protected. There are a wide variety of financial risks property owners are vulnerable to, and the only way to mitigate your losses in the event of a disaster is to have sufficient home insurance coverage. However, choosing the right policy can be challenging as you try to ensure you’re meeting all your needs while getting the best deal possible. Here are a few basic fundamentals to understand about home insurance before you start shopping.

What You Need to Know About Home Insurance

Coverage Options 

Homeowners have different coverage options to select from. One decision you will need to make is whether to buy a named peril policy or an all-risk policy. The first tends to be less expensive and only covers the specific perils listed in the policy, while the other will cover any loss to your home except explicit exclusions. You must also decide if you want an actual cash value policy or replacement cost coverage. The difference is getting the current market value to repair or replace your home minus depreciation, or getting whatever it costs to repair or replace your property. 

Why It’s Important 

Home insurance is important for three main reasons. It will protect you against liability if someone gets injured on your property or you cause damage to another party’s property. You will also be covered to repair or replace your home and personal belongings should you experience a partial or total loss. Additionally, if you obtained a mortgage loan to purchase your home, you will need coverage to satisfy your lender’s insurance requirement.

What a Standard Policy Does & Doesn’t Cover 

There is no one-size-fits-all home insurance policy, but there are certain events that standard coverage includes and excludes. Homeowners are generally protected from loss due to fire, smoke, hail, lightning, theft and vandalism, harsh weather conditions, trees and other falling objects, and some water damage. Policies usually exclude coverage for floods, land movement, normal wear and tear, and sewer backups. 

Factors Used to Calculate Premium 

A number of factors are taken into account as insurance companies try to determine what your coverage costs should be. Although considerations can vary from one provider to the next, some of the most common things they review include the cost to rebuild your home, the home’s age, condition, and location, your credit score, your claims history, the type of pets you own, and the installation of safety and security features.  

The more educated you are on home insurance, the easier it will be to customize a policy that perfectly suits your needs and budget. The professionals at Sun Valley Insurance can help you navigate all the complexities of shopping for adequate protection. Offering 30 years of combined experience, their agents have extensive industry knowledge and will take the time to explain all your coverage options. They have been entrusted to provide numerous Indian Trail, NC, residents with quality products. Call (704) 282-1155 to request a quote, or follow them on Facebook for more information.