Types of Household Insurance
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If you're like most people, you probably haven't given much thought to the type of household insurance you have. The mortgage company required you to have insurance, so you got it. As long as the policy met the mortgage company's approval, you probably didn't worry too much about whether it really met your needs.
Household insurance is not one size fits all, however. There are different types of coverages available, and it's important to make sure that you have the type of coverage you need.
Household Insurance Types
A basic household insurance policy covers the home in case of fire or theft. These policies can be written to cover either the actual value of the home or the replacement value. If it would cost more to rebuild your home than what it is currently worth, you need to make sure you are insured for the replacement value.
In addition to fire and theft insurance, you can get household insurance that will cover damage to your home that is caused by storms, accidents and natural disasters. Storm coverage covers damage from wind, hail or snow. Accident insurance covers things like your pipes bursting and flooding your kitchen. Natural disasters that you may be able to obtain household insurance for include hurricanes, earthquakes and flooding.
You may need to get an additional household insurance rider to cover other structures on your property besides the house, such as a garage or shed. You may also need additional insurance to cover your landscaping or garden.
Many household insurance policies exclude business use of the home. If you are running a small business from your house, make sure you read your policy very carefully to ensure that your home is adequately insured.
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