The month of June has not started well for us. We discovered water damage in our daughter’s room, every time we do laundry, the neighbor below gets flooded and on top of all that, our summer home had some water and wind damage because of a big storm.
I have to say that we have been quite lucky and have not had to deal with these kinds of problems before, so we didn’t know really well what our property insurance covers and what not. So we did some reading and learned a lot of things we had no idea about.
If you are looking into getting property insurance then it is important that you know all of the facts and the options available to you. We have an insurance that was included in our mortgage conditions and sadly, we did not do the proper research about all the different insurance packages.
As with any type of insurance, it can be a bit of minefield trying to understand all of the different coverage options and additional features which insurers will offer. In order to help you get the very best deal on property insurance, here are some answers to some of the most common things you should know when looking to cover your property.
What Does ‘Property Damage’ Cover?
This cover will typically pay for damages which were caused by fire, lightning, windstorms, hail or any other severe weather condition. It is important to note that this does not cover acts of God such as floods, earthquakes or tsunamis, for this you will have to select an additional and more specific cover.
What is a Deductible?
The deductible on your home insurance policy is how much you will have to pay yourself when making a claim. If you find a very low premium, it is likely that this will have a large deductible attached to it. In the same vein, a higher premium is likely to have far lower deductibles. For example, if your policy offers you a limit of $10k on personal item damage, you may have to pay $1,000 when making this claim. You can set your own deductible when selecting insurance.
Are All Structures Covered?
Typically, the basic cover will only cover the structure of your home property, if however, you have sheds, freestanding garages, or even separate buildings on the property, you will need to select the additional coverage for these structures.
What Does ‘Additional Living Expenses’ Cover?
If your home has been severely damaged or completely destroyed, this coverage option will pay for your living costs whilst repairs are made on the property. This could include anything from transport costs, rental costs or any other additional costs which are caused by your living away from home.
What Is the Difference in Valuations?
When it comes to the payout by the insurer upon making a claim, these are broken down into two different categories. You can select actual cash value which will give you a payout for the current value of your property or possessions, this will include depreciation. Alternatively, you could select replacement value which will not take into consideration any depreciation and will instead pay you the current rate of your personal possessions or your property.
Will Insurance Cover All Valuables?
There will always be caps on how much the insurer is willing to pay out for loss, damage or theft of valuables. Generally, these limits are enough to cover most people’s valuable possessions, but if you have something of high value then it is far better to separately insure these for their high value.