Different Types Of Homeowners Insurance Plan Coverage

Many people are horrified to discover that when it comes time to make a claim against their property insurance policy the insurance company pays out less than they expected. This happens all too frequently because people do not realize that there are different types of cover available and the type of cover which you pick can make a tremendous difference to the amount of money which you get.

If you are currently paying for what you think is full insurance cover then here are several things you need to consider.

First, the cover you choose should be based on the rebuilding cost of your property and not its market value. In just about every case the rebuild cost will be greater than the price which you paid for your property or today's market value. Remember too that, when you purchase a new home your lender will normally only specify that you have to insure the property for the value of your mortgage as they are concerned only with getting back their loan should the property be lost. This degree of cover will clearly keep your lender happy but will not give you with sufficient funds to rebuild your home.

Second, you should think about arranging replacement cost coverage for structural damage. This will cover you for the cost of replacement or repair with material of a similar type and quality and that no deduction will be made for such things as wear and tear and depreciation because of age. For older homes replacement cover may not be available, but it will be possible to purchase modified replacement cover which will repair and replace items using materials and techniques currently in use. Insurers differ greatly in how they view older homes and you may have to shop around to find what you require.

Third, you should consider purchasing guaranteed replacement cost insurance which will pay out whatever money is needed to rebuild your home to the condition it was in before the event giving rise rise to your claim. Here, your insurance company will pay out even if the sum needed is in excess of the limit on your plan. Once again this type of cover may be hard to find if you own an older property.

Finally, think about whether or not you require cover against flooding. The majority of policies nowadays are not going to cover you for flood damage but cover can be bought through the National Flood Insurance Program which can be contacted through your insurance broker or by telephoning 1-888-379-9531. More information is also available on the National Flood Insurance Program site.

A short note about insuring the contents of your property.

You ought to draw up a list of everything which you and other members of your household own which is kept in your house or in other buildings which are situated on the property. This will not generally include automobiles or boats which have to be insured separately. Your list should include such things as indoor and outdoor furniture, kitchen equipment, linens, appliances, hobby materials and recreational equipment, clothing and other personal belongings. You must then estimate the value of your personal possessions at present prices and make sure that you have cover for at least this sum. High value items such as personal computers, jewelry, antiques, furs etc. will need to be listed separately and you may have to pay an additional premium to cover these items.