Homeowners Insurance - What Is It and Why Is It Important?

Door Sophiaderek gepubliceerd op Tuesday 15 September 20:31

Designed for the protection of residential real estate. It usually covers residential property that is used as a place of residence and that is owned by the policyholder. The policyholder will often include his or her personal belongings in the insurance amount. Homeowners insurance is usually purchased to protect the policyholder from any liability claims, theft or damage to his or her residential property or to other homeowners or tenants. Homeowners insurance is sometimes purchased in addition to a renters' insurance policy, and homeowner's insurance is sometimes purchased as a result of an insurance claim against the property. When buying homeowners insurance it is always a good idea to get quotes and do some comparison shopping so that you are able to get the best price on your coverage.

 

Homeowners insurance is different from auto or health insurance because of its different nature and requirements. It is required by law to include an actual cash value clause. The actual cash value clause means that if the policyholder were to die or become disabled and unable to pay for his or her home or the policy was to lapse and be canceled, the policyholder would receive the insurance payments, if any, for his or her home. There is also a replacement cost clause included in many policies. This means that the policyholder pays for all damages that are not covered by the policy.

 

Most insurance policies also have a deductible. This is the amount, or premium, that the policyholder must pay before he or she has to start paying for insurance coverage. The deductible can be very high. If the policyholder cannot afford to pay the full premium for the policy, the policyholder can opt out of the deductible and pay only the amount of the premiums that he or she can afford to pay. This type of policy is generally referred to as "guaranteed renewal", because the policyholder can renew the policy by paying the full premium every year if he or she is unable to pay the deductible. A guaranteed renewal policy is not as expensive as one that has a deductible and allows the policyholder to renew the policy for several years at a time.

Best Regards

Elite Insurance

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