Getting to Know Your Homeowner’s Insurance Policy

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Taking out a policy on your home is not just a necessity; it also offers a great deal of comfort to homeowners knowing that while dangers lurk everywhere, the value of their property is pretty much protected through homeowners’ insurance. While most of us go through the entire process of buying a policy with eyes half closed and oblivious to all other “insurance-speak” terms hurled at us except for when the term premium is mentioned, it actually pays to know more about the home insurance policy which you’re taking out.

In a nutshell, here are some of the basic elements which every homeowner’s insurance policy should carry:

Guaranteed Replacement Value Insurance

This is the type of home insurance policy which you should be shopping for. What this type of policy essentially assures policy holders is that the insurance company will help in the rebuilding of your home in the aftermath of a disaster regardless of how much this would cost. Believe it or not, not all home insurance policies offer this kind of compensation. With the burgeoning costs of constructing new homes, it’s very possible that the cost of building a new home is substantially greater than the amount which you originally purchased your home for. However, guaranteed replacement value policies will cover these costs regardless of the disparities.

Endorsement

In the legal sense, endorsement is tantamount to making an amendment to your policy. But for policy holders, an endorsement is a manner of making sure that the high-priced possessions of homeowners receive coverage should there be any disaster. The manner of making an endorsement starts with making a formal appraisal of the item that is to be insured. Once the item is appraised, this appraisal is sent to the insurance company together with a special notation. What these appraisals basically do is to prove not just the financial value of the item but also that the item really does belong to the policy holder. With an endorsement, an item receives coverage in cases of theft, damage due to disasters and loss. Most of the things which homeowners endorse include jewelry, antiques, collectibles and furs.

Documentation

One of the ways to hasten the processing of your claims and prevent discrepancies is to document your entire home including its contents. You can take photographs and videotape not just the inside of your home but its exteriors as well. While stashing it in a fireproof and waterproof box may be fine, storing copies at a relative’s house is recommended.

The writer and editor, Kevin Walker, provides great insights about home insurance .

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