Before you buy homeowners insurance you need to understand what a basic homeowners insurance policy covers. You will want your actual building covered, but also need to protect valuable property. You probably want to consider the replacement value of your belongings, which will allow you to buy new things. Otherwise, your things will be valued at garage sale prices. If you have valuable items, like jewelry or a business computer, you may need more then basic coverage.
If your premium is too high, consider adjusting the deductible rather then lowering the maximum coverage. An extra $500 – $1,000 will be something you can come up with, and will save you hundreds of dollars in premiums anyway. But you don’t want to skimp on the top end or you can be out of lots of money if you do have a severe claim.
Also, most home insurance policies do not cover floods or earthquakes. If you are concerned about these claims, you probably need a seperate policy. National flood insurance, for instance, is an inexpensive way to protect yourself in case of high water damage.
Also, the type of home insurance you will get will be different depending upon your status. Owners and renters have different policies, as do landlords and condo owners. Learn about different types of home insurance policies here.
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