Home Buying a Home Insurance: What Coverage Is Important?

Insurance: What Coverage Is Important?

by Eric Rothman
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Most mortgage companies require that buyers purchase homeowner’s insurance, and it’s a sound requirement. If anything happens to your house, you want the peace of mind to know that you’re covered.

Homeowners insurance not only covers damage to your house and what’s in it; it also covers your liability for injury or property damage that you or your family cause, including pets.

There is a wide variety of insurance options. We would love to help answer your questions. Give us a call at (855) 739-7727.

How Much Coverage Do I Need?

Your mortgage company will likely require you to have enough insurance to cover the value of your mortgage, but many experts agree that may not be enough. You’ll want the insurance to cover the rebuilding of the house itself, the replacement of your personal possessions, living expenses incurred while the house is being rebuilt or repaired, and/or any liability owed to others. 

Do I Need Any Other Coverage?

Flood insurance: If you have a mortgage in a high-risk flood zone, you’ll be required to get flood insurance, but even those in less risky areas may want to consider it. According to the National Flood Insurance Program, nearly 20 percent of flood insurance claims come from areas of moderate to low risk. Earthquake Insurance: If you can afford it, you should get it, especially in California. However, it’s usually not cheap and policies often have deductibles as high as 10 or 15 percent. If you decide to skip it, you’ll have company. Only about 12 percent of California homeowners carry the coverage according to the California Earthquake Authority. 

Home Business Insurance: If you run a business from your home, adding home business insurance could be wise as most homeowners policies provide only limited coverage for home businesses. Expensive equipment or injuries to people visiting your home business probably aren’t be covered under a normal policy. 

Valuable Personal Property: Homeowners insurance only goes so far when it comes to personal property. This is especially true if you own expensive items like jewelry, art, furs, firearms, silverware or anything with a high price tag that insurance companies tend to put a cap on reimbursing. You’ll need to check what your policy covers, inventory you own, and find the gaps to determine what kind of personal property insurance you need. 

Umbrella Insurance: What if someone falls on your property or you’re responsible for a car accident with serious injuries and you get sued for more than you’re covered under your homeowners or car insurance policies? For anyone with significant assets (and even those of modest means) an umbrella policy will protect you from a claim that goes beyond the limits of your homeowners or car insurance policy. You’ll want to get an umbrella policy from an independent insurance agent who takes the time to understand your specific financial situation and is serious about protecting your interests.

Still, have questions? We would love to help! You can reach REX Insurance at (855) 739-7727

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