When you purchased your home, you also purchased a comprehensive homeowner’s insurance policy. The purpose of this policy is to cover expenses, should any serious damage occur to your investment. Despite what buildings insurance policies might cover, most people don’t fully understand exactly what their policy covers.
There are those who believe that their homeowner’s insurance will cover any event that causes damage to their home. They even think that if their home is totally destroyed, this insurance will cover its complete replacement. First of all, most policies do not cover reimbursement expenses equal to the market price of a person’s home. Most do cover costs to rebuild, but that is generally less than the market price of a home at the time it suffered damage. What is more, most policies have a cap which may prevent a person from completing the rebuilding of their premises.
These are some things you need to be aware of at the time you buy coverage. You should speak with a policy expert cheap insurance may or may not be worth it. Many people are unaware that certain disasters are not covered by their policy. For example, most policies do not cover the expenses for damages that occur due to floods – though separate policies can be purchased for that.
Many may not be aware of the fact that many, if not most, of a person’s belongings are covered but only up to a certain amount. They also may not know that they must estimate the cost of their items and that, over time, replacement costs are affected by depreciation. Once again, a person can purchase additional riders to make up the difference in such cases.