Having homeowner's insurance is a great idea if you own a house, and it is a legal requirement if you have a loan on the house you own, but not every policy is equal. If you want to make sure that you are covered fully in the event of a major loss to your home, you should make sure your policy includes the following three features.
Replacement Cost Coverage
The first feature you should look for is a policy that offers replacement cost coverage, which is a method used to calculate losses after a claim. Replacement cost coverage is the method that bases your losses on the amount of money it would cost for you to replace the things you lost to a fire or other type of major issue with your home. This method gives you the full value of your possessions in terms of the costs to replace them, and it is a very different method than the opposite one you could choose, which is called actual value coverage. Actual value coverage takes depreciation into consideration when calculating the amount of your loss.
Additional Living Expense Coverage
Secondly, you should make sure your policy offers additional living expense coverage, or ALE. This particular type of coverage is absolutely necessary if you experience a major problem with your home that forces you to evacuate the home for a while. For example, if you have a fire, your ALE coverage would kick in by providing you with compensation to live somewhere else for the time period in which your house is being repaired or rebuilt.
Riders for Things That Are Not Covered
The other feature you will likely need to have with your home insurance policy is additional riders. A rider is simply an add-on to an existing policy and is designed to offer protection for things your normal policy would not cover if you lost the items. In most cases, riders are added for protection of valuable goods, such as art collections, gun collections, jewelry, or any other type of collection or item that is worth a great deal of money.
If you want to fully protect your home and the things you own, purchasing a homeowner's policy that offers these three features is the best way to do this. If you would like to purchase a homeowner's policy, you can do so by speaking with an insurance agent of your choice. To learn more, reach out to companies like Homeowners Insurance Houston.