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The basics of homeowner’s insurance

Buying a new home can be exciting and overwhelming at the same time.  When going through your insurance checklist, be sure to consider a complete policy that includes liability and personal property protection.  When shopping for quotes, there are five areas that are especially important.  Here are tips to get the best coverage at the most affordable price.

  1. Know the difference between the replacement cost and the market value. Depending on how much was originally paid for the property, the cost of rebuilding can be higher or lower than the market value.  Rebuilding a home is usually cheaper than buying an existing structure unless the original property bought was a foreclosure in which case rebuilding might be more expensive.  The key is to accurately determine the cost of rebuilding when finalizing the details on a homeowners insurance policy.
  2. Take a home inventory and determine the proper amount of personal property protection.  Generally, policies cover 50-75% of the replacement value of the house.  However, this may not be enough to cover certain valuables such as jewelry, fine art, collections, electronics and other expensive items.  A separate rider may be needed and this should be discussed with an agent.
  3. Have enough liability protection. This protects a homeowner if they are sued for an injury that takes place on their property. Many policies will even cover a policyholder if an incident happened away from the house. Depending on their assets, some may want to consider an additional umbrella policy if they are worried about ever being sued for an amount in excess of what their coverage offers.
  4. Know what is not covered. Carefully study the exclusions section of the homeowners insurance policy. This is important to be aware of so additional coverage can be purchased. For instance, if one lives in an area prone to flooding, they may need to buy additional flood protection.
  5. Consider additional living expenses if ever forced from the dwelling. If a house becomes unlivable due to a flood, earthquake, fire or other disasters, a family will need to pay for living accommodations, may need additional money for food and transportation, and other expenses. This coverage is “additional living expenses” (ALE) and is a benefit that is usually worth about 20% of the home’s replacement value. Be aware of the benefits, limitations and exclusion.

When shopping for home insurance quotes, be sure to find a company that is financially stable and has a high customer satisfaction rating.  A.M. Best is a company that rates insurance companies, A++ is the highest rating they give.  Beyond the companies rating, reading reviews of their service, by real customers, can help you see what to expect if a loss occurs.

If the home being purchase is in a flood zone, it will be required, but even if it isn’t it might be a good idea in some cases.  Homes that are not located in a flood zone will be very inexpensive to add flood insurance.  Remember, the rule of thumb is if the water comes from up above and causes damage, it is probably covered in a standard policy, but if the water rises, it is not.

Maronda Homes has been building quality concrete block homes in Florida since 1972.  These homes are rated very high when it comes to insurability.  Owners of concrete block homes generally enjoy lower rates on homeowner’s insurance than comparable wood frame homes.

Please stop by one of our new home subdivisions in the Maronda Homes of North Florida region to learn more about Homeowners Insurance and the easy step by step process to building a brand new Maronda Home.

About Jim Marshall

Jim is a construction professional who has been involved in the new home building industry for over 30 years. He is a Certified General Contractor and Certified Home Inspector, and was associated with Maronda Homes for 16 years before embarking on new adventures in the Jacksonvile area in Florida.

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