It can sometimes seem that there are as many types of home insurance as there are homeowners! The sheer number of policies and the amount of protection that the different policies can give you make it difficult to choose the right coverage. Remember, your home, and its contents are your most expensive investments, you shouldn’t pick the cheapest deal you find. It is important to take the time to find the right policy that will give you the coverage you need. This home insurance guide will give you information on selecting the right policy.

The Two Types of Insurance: Content and Building

There are two main types of home insurance you can get. There are Contents Insurance and Building Insurance.  Contents Insurance covers the contents of your house, while Building Insurance covers the physical structure of your home in case of a disaster, such as an earthquake or hurricane. If you are carrying a mortgage, your lender might insist on this type of coverage so that if you are unable to continue to pay your mortgage, they can still recover the value of your home after the disaster.

Building Insurance

If you do need to get this type of insurance, make sure that it will cover the cost of alternative accommodation during the time your house is uninhabitable. In the event your house is completely demolished, the cost of a hotel stay can add up quickly.  Some policies will only give you market value for your home. Ideally, it should cover the full cost of rebuilding.

Your building insurance should also cover those items in your home that would remain there after you move. Things like sinks, showers and tubs, kitchen cupboards and wall covering should all be insured in this policy.

Contents Insurance

It is important to consider cost when choosing your Contents home insurance policy. Although you do not want to spend a fortune on Contents insurance, it is important to understand what your policy does and does not cover. For example, some policies give you only the market value of goods that you need to replace. If you were to go with a slightly more expensive policy, you would be able to purchase a brand new replacement. Consider this, if a hurricane damages your goods and property, would you rather have the insurance to purchase a brand new refrigerator, or a second-hand one?

Special Circumstances to Consider

Most home insurance policies will usually cover your property for damage due to flood, fire, theft, vandalism and storm. Sometimes you might be interested in a higher level of coverage due to your circumstances.  For example, if you are raising children, you might want to consider adding accidental damage coverage to your policy, as children can be accident-prone. This can provide you with a greater level of security, and you can always remove this coverage down the road, as your children grow older.

Selecting your home insurance can be one of the most important things to ensure your financial independence in the future. Although thinking about fires and natural disasters is not pleasant, having the right home insurance policy is a very important thing.