Homeowners insurance basics are essential to a successful home ownership experience. The homeowners insurance policy is long and full of legal jargon that can deter any Louisville Kentucky homeowner from reading the document in its entirety. As a homeowner, you need homeowners insurance to protect you, your home, and your possessions.

Also, it is important to understand your homeowners insurance policy to ensure you are getting the appropriate coverage. You do not want to wait until a claim is denied to learn about your coverage. Here is a guide to homeowners insurance that will help you with the homeowners insurance basics.

Homeowners Insurance Basics 1: Select Your Home Insurance

The first step to homeowners insurance is selecting the best insurance carrier for your needs. Start with researching companies through online reviews, personal recommendations from family, friends, and neighbors, and by contacting Kentucky’s National Association of Insurance Commissioners (NAIC) to ensure the home insurance company is reputable.

Always make sure the carrier is financially strong. When meeting with the home insurance company, ask all of your questions and be sure you get solid answers to those questions. You need to be comfortable with the homeowners insurance carrier you select.

Homeowners Insurance Basics 2: Know Your Louisville Home

If you lost your entire home and everything in it, your homeowners insurance policy must be able to pay enough money to rebuild the exact same house in the exact same spot it exists now with the replacement value of all the property inside and out that was damaged or lost.

Do not focus on the dollar amount of what you bought the house for but rather the amount of money it will take to replace your Louisville KY home in its current state. Be sure to include custom-built cabinets and countertops, fixtures, flooring, wall paper – you include it all in the replacement price. Any renovations that have been completed on your house also need to be included in the policy because of the value-add to your Kentucky home.  

Another homeowners insurance basics tip is to research the market price of homes similar to yours in your neighborhood and include the effects of construction of a new homes in your area as part of the homeowners coverage – especially if the market is doing well.

Homeowners Insurance Basics 3: Know Your Valuables and Possessions

Do not forget to include your valuables and possessions within your homeowners insurance policy. If you lost your home, and everything in it, you will want all your property replaced. Items such as televisions, furniture, collectables, etc. need to be included in the policy’s Replacement Value Insurance.

Be sure to request and discuss this additional insurance because most insurance carriers do not include replacement value insurance with a standard homeowners insurance policy. Understand the carriers replacement value in detail.

  • Is the policy “fair market value”? This means insurance only pays the depreciated value of the property.
  • What is the process for claiming property? Many homeowners insurance companies require proof of purchase, value of the item at the time of loss, and time-consuming documentation.
  • How does the policy pay for the replacement property? Many companies require the homeowner to purchase new products first, provide receipts and documentation of the purchases, and then reimburse the homeowner.

Homeowners Insurance Basics – Other Important Tips

Deductible. As with any insurance, you will be required to pay monthly premiums and, if anything should happen to your home or property, a deductible will be required. The lower your monthly premium, the higher the deductible. Ask yourself: If you lost your home, what is the most money you could pay up-front? That is your deductible.

Liability Insurance. If anyone gets hurt on your property, you will need to be properly insured with liability insurance to protect yourself from lawsuits. Liability insurance protects you from falls, dog bites, and other injuries that visitors to your property may sustain.

For a more detailed description of homeowners insurance coverage, the National Association of Insurance Commissioners (NAIC) has a very informative consumer’s guide to home insurance.

Homeowners insurance basics are important to any Louisville Kentucky homeowner. So there are no surprise to the homeowner, you must understand your homeowners insurance policy inside and out to avoid any issues should anything happen to your home or property. A successful homeowner will research homeowners insurance companies to find a good fit for their needs, ask the right questions to get the policy they need, and have a basic understanding of their policy to ensure their home and property is protected.