Most people realize that when you own a home you need to get insurance on the home. Well most people just call an insurance agent and say they’re buying a house and they need insurance. The agent then asks number of questions, and then comes back and says he’s going to cost you this much. And most people say okay.
It could be a little more complicated. Let’s explain a little bit about owners insurance.
We’re going to talk about the two most prevalent types that we will run across in our area of the country. We’ll talk first about insurance for a condo or a townhouse.
When you purchase something that is that kind of ownership you own the exterior walls halfway through and the association owns the exterior walls halfway out. The walls that divide your home from the homes alongside you the left or right and back or above or below, you own those walls halfway into the center and someone else owns the other half of that wall.
Let’s talk about what happens in a worst-case scenario. Let’s say, God forbid, a fire totally guts to the building. The condo association’s insurance will take care of repairs to the extent of what they are liable to cover, which is the exterior of the building, the roof, the sheathing and half of the two-by-fours that go up. The homeowner is responsible for the other half of those, the insulation, sheet,rock and paint. And if you don’t have insurance you don’t want to know what’s going to happen here. You also have to worry about other things such as ceiling lighting fixtures, Plumbing, electrical systems, heating ventilation systems, appliances, cabinets and much more. And let’s not forget about personal property. Your clothing, furniture, Electronics and more. So you need insurance. With the condo, when you apply for insurance agent typically will quote the standard amount of insurance. The last time I checked it was $10,000 to cover everything on the inside. Will $10,000 cover your damages and losses? I doubt it. Speak with your agent about getting additional insurance.
Now let’s talk about a single family home. With a home you have to worry about everything on the inside and the outside. The homeowners policy for a detached home is actually a little bit simpler. The agent will get you on the phone and ask questions about the building. They’ll ask about the square footage, how many rooms, what type of finishes are on the floors, wallpaper, what the appliances are etc etc etc. And then they will come up with a number which will cover replacement in case of a worst-case scenario. I recommend all around again get to three different quotes, and then make your decision
Here’s one last thing about insurance. If you have your homeowners and your auto insurance with the same company, you’ll probably get a break on the homeowners insurance. Think about having them all in one place.
