Choosing The Right Homeowner’s Insurance

by | Apr 17, 2013 | Insurance

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A house is one of the most prized and valuable possessions you can own. It’s an investment as well as a secure and comfortable place to live. Over the past decade, a lot of houses have been damaged or completely wiped out in storms, hurricanes or other natural disasters. It is but natural to have a desire to be able to protect your home against such disasters.

The demand for homeowner’s insurance in the United States has grown tremendously over the past decade. A lot of companies offer insurance coverage for your homes in various Illinois cities whether you choose Home Owner’s insurance in Waukegan or in any other city. The various types of homeowner’s insurance policies are as follows:

1) Cash Value Policy: The cash value policy compensates the homeowner on the basis of the historical cost of the house. The historical cost is the price at which the house was originally bought. In such circumstances, in case of an untoward incident, the insurance policy will only cover the cost at which the house was bought minus the depreciation. Therefore, it does not take into consideration the market value or the cost of rebuilding the house. Over the years, the cost of material and labor increases drastically; there being no consideration for inflation.

2) Replacement Value Policy: A replacement value policy will cover the cost of replacing the house or the belongings contained within to the extent of the coverage applied for. In case of a replacement policy, make sure to get coverage for inflation as well. The best approach is to ascertain with your contractors every year or so regarding the cost of replacing your house with a new structure.

3) Cover for your Possessions: A lot of companies provide cover for your possessions, from 50% to 75% of the total structure insurance. Before ascertaining how much you would like to cover, it?s always a good idea to have an inventory of the total items you have under the roof of your house. If you own expensive items, then you should opt for greater coverage.

The type of insurance policy you choose depends on how comfortable you are with a certain policy and how much you can afford. Choosing the right policy saves you future trouble when getting compensated against losses.

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