A home is the biggest investment most people will make, and getting the right insurance policy to protect it is an important part of buying a new house. Most people don’t realize that there are various types of home policy and different levels of coverage. InsuranceHotline.com makes it easy to choose the right policy with simple tips and a look at the differences between coverage levels.
When buying a home, choosing insurance can seem like a peripheral consideration. But even with everything else to think about during the process, taking the time to choose the right policy will pay off should a claim ever become necessary. Home insurance comes in three main types: basic, broad, and comprehensive. Each of these levels adds more coverage and provide for a wider range of perils. The one that is selected depends upon a few factors; some homes may only qualify for the lower levels, and of course budget is a consideration.
Basic Home Insurance
A basic home insurance policy will cover the house, contents, and homeowner’s liability for specific perils. This means that it will only provide coverage in the event of a claim stemming from the perils that are named in the policy. These include basics like fire and theft. Anything not listed will not be covered.
Basic home insurance is a good choice when looking to save money as it is the least expensive option. It’s often selected for second home such as cottages. It may also be a good choice on a home that needs a lot of work as such homes might not yet qualify for comprehensive coverage under the insurance company’s rules.
Broad Form Home Insurance
A broad form policy offers a little more than a basic policy and usually will cost a little more. It’s a middle ground between the two and is a good choice to those who need to save money but want more than the most basic coverage. In a broad policy, coverage for the structure will be raised to an all perils level, meaning unless it is specifically excluded on the policy, it will be covered. However, contents coverage remains at a named perils level.
This allows better coverage for the home itself against more possible risks. Since the cost to rebuild a home is much higher than the cost to replace the contents in most cases, this type of policy protects home owners a little better from a major financial loss.
Comprehensive Home Insurance
The top level of home insurance coverage offers all perils coverage for both the structures and the contents, giving the best possible protection from a wide range of risks. "Homeowners may want to select a comprehensive policy to provide as much peace of mind as possible," says Tammy Ezer of InsuranceHotline.com. While no policy can protect from every possible risk, this will give the most coverage available.
Although this type of policy is the most expensive, it is the most common choice for the average homeowner. Of course, not every home will qualify, but most well-kept or newer homes should have no problem. The investment in a higher premium will pay off in the even t of a claim.
Compare home insurance quotes before buying; it’s possible to get a better deal on a comprehensive package from one company than the quote for a lower level of coverage elsewhere, providing more coverage for less.