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Homeowners Insurance vs. Home Warranty: Understanding the Differences
Protecting a home’s investment is a top priority for homeowners. Homeowners insurance and a home warranty are two essential tools in safeguarding a home. While both provide financial protection, they serve different purposes and cover various aspects of homeownership. Understanding these differences can help homeowners make informed decisions about their coverage needs. What Is Homeowners Insurance? Homeowners-insurance protects a home and its contents from unexpected damages, theft, or liability issues. Mortgage lenders typically require it, and it is essential for financial protection in disasters. What Does Homeowners Insurance Cover? A standard homeowners-insurance policy covers: Dwelling Protection – Covers damages to the home’s structure caused by hazards like fires, storms, or…
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7 Things Nobody Tells You About Homeowners Insurance
When you buy a home, one of the first things you’ll need is homeowners insurance. You’ll probably hear the basics—what it covers, how much it costs, and why your lender requires it. But beyond the brochures and quotes, there’s a lot more to know. Some things only become obvious after you’ve filed a claim or had your policy for years. Here are seven things nobody tells you about homeowners insurance but definitely should: 1. Your Policy Probably Doesn’t Cover Everything You Assume It Does Many homeowners are surprised to find out their standard policy excludes certain disasters. For instance, floods and earthquakes are almost always excluded. If you live in…
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Homeowners Insurance Deductible – What Does It Cover?
Understanding your home insurance deductible can help you decide how best to protect what may be the most expensive purchase you ever make. Unfortunately, it’s not always easy to understand your policy’s fine print. Keep reading to learn how a homeowners deductible works, how it affects your premium, and how much of a deductible you may need. What Is a Home Insurance Deductible? Simply put, a home insurance deductible is the amount that a homeowner must pay before their insurance steps in to cover the remaining expenses on a claim. The deductible is expressed as a fixed dollar amount – usually $500 to $2,000, but it can be higher –…
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How Your Credit Score Affects Your Insurance Rates
Your credit score doesn’t just impact your ability to get a loan or a credit card—it can also influence your insurance rates. Many insurance companies use credit-based insurance scores to help determine the premiums you’ll pay for auto, home and even renters insurance. Understanding how your credit score affects these costs can help you take steps to secure better rates. Why Insurance Companies Use Credit Scores Insurance providers use credit-based scores because research shows a correlation between credit history and the likelihood of filing claims. Statistics suggest that individuals with lower credit scores tend to file more claims, leading insurers to charge higher premiums as a precaution. Conversely, those with…
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Can I Buy Title Insurance After Closing?
When purchasing a home, title insurance is often recommended or required to protect against potential ownership disputes, liens, or claims against the property. However, what happens if you don’t purchase title insurance at closing? Can you still get it afterward? The short answer is yes, but there are essential considerations to remember. Understanding Title Insurance Title-insurance protects homeowners and lenders from financial losses related to title defects, such as fraud, undisclosed heirs, unpaid liens, or recording errors. There are two types of these insurance policies: Lender’s Title-Insurance: Most mortgage lenders require this policy to protect the lender’s interest in the property. Owner’s Title Ins: This optional policy protects the homeowner’s…
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What is equipment breakdown coverage? How does that work?
What is equipment breakdown coverage? Homeowners insurance protects your home and belongings against unexpected events like fire, theft, and natural disasters. However, standard policies often do not cover household appliances’ and home systems’ mechanical or electrical failures. This is where Equipment Breakdown Coverage (EBC) comes in. What Is Equipment Breakdown Coverage? Equipment Breakdown Coverage is an optional add-on (endorsement) to homeowners insurance that covers sudden and accidental mechanical, electrical, and pressure system failures of appliances and home systems. It helps homeowners repair or replace essential equipment that stops working due to internal malfunctions rather than external perils like fire or water damage. Unlike a home warranty, which typically covers wear…
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What Is Extended Replacement Cost?
Searching for information on extended replacement cost? One of the most critical factors when insuring a home or property is whether your coverage is sufficient to rebuild in case of a total loss. Extended replacement cost is an insurance provision that provides additional coverage beyond the dwelling’s insured value, ensuring that homeowners can rebuild their homes even if costs exceed the policy’s base limit. This type of coverage is particularly valuable in scenarios where construction costs rise unexpectedly due to inflation, supply shortages, or increased labor expenses. Understanding Replacement Cost Coverage Before diving into extended replacement cost, it’s essential to understand how standard replacement cost coverage works. A standard homeowners…
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Does homeowners insurance cover valuables?
Many people wonder if their valuables are fully covered when considering homeowners insurance. The answer isn’t straightforward, as coverage depends on several factors, including the policy type, the items’ value, and specific coverage limits or exclusions. Standard Coverage A typical homeowners insurance policy covers personal belongings, including furniture, clothing, electronics, and other items. However, coverage is often limited for high-value items such as jewelry, artwork, collectibles, or expensive electronics. For instance, a standard policy might cover up to $1,500 for jewelry theft, which may fall short of replacing a valuable engagement ring or a family heirloom. Replacement Cost vs. Actual Cash Value Understanding how your policy reimburses you is crucial.…
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What is an Insurance Endorsement?
Searching for more information on what is an insurance endorsement? Insurance is a fundamental tool for managing risk, but sometimes, standard policies don’t cover specific situations or assets. This is where an insurance endorsement, also known as a rider or amendment, comes into play. An insurance endorsement is an add-on to a basic insurance policy that alters its terms, coverage, or conditions. Endorsements can provide additional protection, modify existing coverage, or clarify ambiguities within a policy. Understanding the Basics Endorsements allow policyholders to customize their insurance policies to better suit their needs. They typically address standard coverage gaps or adapt to unique circumstances. Endorsements can be added at the start…
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Does homeowners insurance cover basement flooding?
Does homeowners insurance cover basement flooding? When protecting your home, homeowners insurance is a crucial safeguard. However, many homeowners need clarification about whether their policy covers basement flooding. The answer depends on the source of the water and the specific terms of your insurance policy. Here’s an in-depth look at what homeowners insurance typically covers and what it doesn’t when it comes to basement flooding. Covered Causes of Basement Flooding Standard homeowners insurance policies are a comforting shield, generally covering water damage that results from sudden and accidental events inside the home. For instance, if a pipe bursts in your basement and floods the area, your policy will likely cover…
