Choosing Your Home Insurance Coverage: 3 Important Things To Remember

Your home insurance policy will provide you with some very important financial protection in the event anything ever happens to your home. However, in order to ensure you have all of the protection you need, you will need to first ensure you are choosing a policy that offers the coverage you require. The most effective way to do this is to work closely with an experienced home insurance agent and to keep the following three factors in mind when selecting your coverage options.

#1: Your Rebuilding Costs Are Not The Same As Your Home's Resale Value

Just as you want to make sure your home insurance policy offers adequate coverage, you also want to ensure that you do not end up paying for more coverage than you actually need. That is why it is so important to remember that the cost of rebuilding your home after a disaster is often not the same as your home's actual value. The reason for this is that when you rebuild a home, you are simply rebuilding the structure itself. You do not need to pay for the land that the home sits on since you already own this land. Consequently, you will want to choose an insurance policy that offers an adequate amount of rebuilding coverage without paying for more coverage than is required to get this job done. 

#2: Not All Perils Are Automatically Covered

Many homeowners make the mistake of thinking that their home insurance policy will automatically cover damage to their home regardless of how this damage occurs. While it is true that standard home insurance policies do cover quite a few perils, the fact is that there are some common perils that will not be covered unless you choose to purchase additional coverage. Perhaps the most common peril that is excluded from standard home insurance policies is flooding. If you want to ensure you are protected against flood damage, you will need to add flood insurance to your policy. 

#3: Home Insurance Policies Will Not Protect Home Businesses

If you intend to run a business out of your home, it is important to remember that your home insurance policy will not cover any items related to this business. Furthermore, your home policy will not cover any injuries that are suffered by individuals who are on the property for the purpose of visiting your business. Consequently, you will need to either purchase a ride-on for your home insurance policy which provides this additional coverage or you will need to purchase a separate business insurance policy.