To protect yourself against the loss of your home and its contents as the result of a fire or natural disaster, it's important that you have a homeowners insurance policy with adequate coverage. Applying for homeowners insurance is a process. First, you must do some research, choose an agent or company to work with, and, finally, make the best choice regarding a policy.
Ask a contractor who builds homes to do a walk-through of your home to determine how much you would have to pay to have it rebuilt if it were destroyed. Or, once you choose an insurance agent to work with, ask him to estimate the cost of the rebuild.
Take an inventory of the contents of your home to determine the replacement cost or actual cash value of the contents. The replacement cost is what you would have to spend to replace the item. Actual cash value is the amount the item is worth when it is lost or destroyed. Replacement cost insurance generally costs more than actual cash value insurance.
Decide how much homeowners insurance you want. The amount of insurance should cover the cost to rebuild your home and furnish it as it is currently. At the same time, decide on the highest amount you can afford for a deductible. Note that the higher your deductible amount, the lower your premiums.
Shop different insurance companies and agents to find a homeowners insurance policy that fits your situation and budget the best. Any company or agent should be willing to give you a free quote for the opportunity to earn your business. You can choose to work with a direct seller, a company who sells insurance directly to the consumer; a captive agent, one who only sells policies from a specific insurance company; or an independent agent, who can give you information on various policies from different companies.
Fill out an application with your desired company or agent and wait for approval. Don't forget to tell the agent about any special coverages or increases you need, such as increases on wind and hail coverage if you live in an area with high incidences of either condition, and ask him to include those in your policy.
- Your state may offer state-sponsored insurance programs for people who are denied homeowners insurance through traditional channels. Do an Internet search for your state's Fair Access to Insurance Requirements (FAIR) plan for more information.
- Ask the insurance company or agent about special discounts offered. For example, if you insure your home and your auto with the same agent or company, a discount may apply. If you have safety devices in place, such as dead-bolt locks, smoke detectors or carbon-monoxide detectors, you also may receive a discount.
- As your home's value increases or you acquire additional expensive contents, you need to increase your policy limits.
- Items of exceptional value may not be adequately covered within a standard homeowners insurance policy. Ask your insurer if you need to purchase additional coverage.
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