Shopping for homeowner’s insurance can be confusing. An insurance salesperson will present you with many different options for protecting your home. It can be difficult to know what coverage is necessary and what is simply an extra expense. You want to make sure that the policy you get protects your home and everything in it.
Hazard insurance generally covers the structure of your house. It will cover other structures on your property, such as sheds, carports, or garages as well. Although the law does not require homeowners to get hazard insurance, lenders will require you to get this type of coverage before financing your home.
Types of Hazard Insurance
Miami, Florida is beautiful, but its proximity to the ocean and forests means that hurricanes and forest fires are common occurrences. As with most types of insurance, you will choose the amount of money for which you are covered and the deductible that you will pay.
There are quite a few things that hazard insurance can cover. Not all insurance policies will cover every one of these things. Every good hazard policy will include damages from:
- Fire
- Wind and hail
- Smoke
- Vehicles
There are some hazard policies that will protect your property from airplane damage. Nowadays, there are even policies that will protect a home or business from riots and bombings. There has been plenty of property destroyed around the country, and this is a real concern.
The type of coverage you need will depend upon where you are. People in Florida will not need coverage for damage done by the weight of ice and snow. You will never have to worry about a volcano erupting in Miami, as there are no active volcanoes here. Hence, you will not need hazard insurance for a volcano.
A homeowner’s insurance policy should cover a person who is injured on your property. However, it is not considered hazard insurance. If your house has mold, the mold itself is not considered a hazard. However, mold removal may be covered if it was a result of a hazard for which you are covered.
Although hurricane damage may be covered, flood insurance must be purchased separately. You will also need a separate policy for earthquakes.
Three Basic Types of Insurance Policies
Your hazard insurance is part of your homeowner’s insurance policy. There are three basic types of homeowners insurance policies. You should know a bit about them before deciding which one is right for you.
Extended Replacement Cost Value
This is the most expensive type of homeowners insurance policy, but it is also the best. It will cover the current market value for home repair. It will also pay for the replacement of everything that was damaged in the home at market value. You can exceed the policy limits if you can prove your coverage would not pay for all items you need to replace.
Replacement Cost
This will pay for repairing or rebuilding your house. It will pay for the value of items in the house up to your coverage amount.
Actual Cash Value
Actual Cash Value coverage is the least expensive type of coverage you can buy. It pays to repair or rebuild your home. However, the value of items inside the home will be depreciated.
For example, If you had carpeting that was worth $3000 5 years ago when it was new, you will be paid the value that it is worth today. The insurance company will decide how many years the carpet was expected to last and divide the original cost by that number.
Let’s say the carpet was 5 years old and cost $3000. It was supposed to last for 7 years had it not been for the incident for which you are filing the claim. The carpet would be depreciated by $428.57 a year. You would be compensated $857.14.
Losing a home to a natural disaster or an accident can be devastating. A comprehensive insurance policy can help you move on with your life. Your home is the biggest thing you will ever purchase and you should protect this valuable asset. You can visit website for more information.