The price of everything has been on a steady uptick for years now. Insurance premiums included. Thankfully, many states govern when and by how much insurance providers may increase their charges. Lenders require their collateral to be covered by homeowners insurance when lending on a property. It’s a good idea to have homeowners insurance in place even when a property is mortgage-free, so the homeowner is protected from expensive accidents or catastrophes. Coverage can come into play not only with the actual dwelling, but also other structures on the land and injury or medical to persons hurt on the premises. It’s important to get a good rate, but also important to know what will be covered.
Coverage can vary greatly as budget rate policies will often be less comprehensive than some of the higher priced policies. Policies will often exclude coverage from flood, earthquakes, landslides, sinkholes, pest infestations, power failure or non-occupancy. Personal property, like cash or expensive collectibles/antiques can be capped are coverage amounts far below the real world value of the loss. It’s critical to know what budget rate policies cover and exclude before deciding what provider to use. Some policies use actual cash values to payout, meaning the depreciation of the asset is accounted for in paying a reduced claim, versus replacement cost to cover the cost of a new replacement. Higher deductibles usually mean lower premiums, but of course mean paying more out-of-pocket to satisfy the deductible if something does happen down the line. If the property is in an area with high occurrences of natural disasters, such as the beach, the exclusions or limitations on coverage may be even more restrictive.