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Buying Guide

Homeowners insurance

Homeowners insurance provides coverage in the event of damage to the property, as well as liability for injuries and damage that might have been caused to other people. This includes damage caused by pets.

Damage caused by most disasters is covered but there are exceptions. The most significant are damage caused by floods, earthquakes and poor maintenance. You must buy two separate policies for flood and earthquake coverage. Maintenance-related problems are the homeowners' responsibility.

Your policy should cover the structure of your home, your personal belongings, liability, and will provide for living expenses in the event that you are temporarily unable to live in your home due to fire or other disasters.

When choosing coverage amounts, it’s important to buy enough to rebuild your home. Other structures on the property should also be covered for about 10%, such as garages, tool sheds, or gazebos.

Personal belongings are covered for 50-70% of your total policy. The best way to make sure your belongings are covered is to conduct a home inventory. You should be covered off-premises as well as from unauthorized use of credit cards. Jewelry is usually covered up to a certain amount as well as “accidental disappearance.” Trees, shrubs and plants are also covered in most cases.

Liability covers against lawsuits for bodily injury or property damage that you or family members cause to others and covers damage from pets. You will be covered on court costs up to the limit of your policy. No-fault medical coverage is also included, so if someone (not family) hurts themselves in your home, they can submit medical bills to your insurance company. Expenses are paid without a liability claim being filed.

Additional living expenses vary between companies, but many policies will pay hotel, food and other living expenses if you are unable to live in the home due to fire, storm or other disaster. It will also reimburse you for lost rent you would have collected.

If buying a condo or co-op, makes sure you understand what areas of the building the association covers and which areas are not. You will most likely need to purchase two different policies – one for your unit and one for the common areas of the structure.

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