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Learning about home insurance

June 25, 2014

When you drive in your car, you wear a seatbelt. When you take a hot pan from the oven, you use a towel or wear on oven mitt. Owning a home is no different. Once you become a homeowner, it's crucial to protect yourself against any unforeseen issues with a home insurance policy.

While it might sound like a defeatist attitude to expect adverse occurrences to happen to your property, it's necessary to protect your belongings from any major surprises. Here are a few things to consider when taking out a home insurance plan.

What will a plan cover?

Most insurance policies will compensate you for any damage to your property or possessions in the case of theft, fire, vandalism or storms. The majority of plans will also provide liability, so if a friend or acquaintance was over at your place and suffered an injury, your policy would cover the medical costs and any potential lawsuit.

Home insurance policies can protect your assets from damage.
Home insurance policies can also protect belongings that reside outside of your home. For example, if you're an amateur photographer and your car was stolen with all of your camera equipment, your home insurance policy will likey cover that loss.

Ellen Derrick, a certified financial planner with LearnVest Planning Services, told Fox Business that affordable home insurance plans might cover more than you think.

“Most policies will cover your belongings when they are traveling with you,” Derrick said. “If you have a $1,200 laptop and it gets lost by the airline, call your insurance agent—right after you file the claim with the airline, of course.”

Shopping around for the right insurance company

Terri Corcoran is a perfect example of why people should not only consider the insurance rate, but the insurance company offering the policy.

Corcoran told Fox Business that a snowstorm caused a major leak in her home, which caused damage in her laundry room. She contacted her insurance agent who then assessed the damage. The agent immediately cut Corcoran a check after determining the entire room needed to be revamped because of the damage.

“They wrote me a check on the spot for what it should cost,” Corcoran said. “I was really impressed by how the company responded!"

People looking for a great insurer should consider SelectQuote Auto & Home. SelectQuote offers comparison shopping from a dozen of the nation's top insurers in order to find you the perfect plan for your home.

Don't wait to file a claim

When your shopping for your insurance policy, it's important to ask if there are any time limits for reporting a claim. The last thing any homeowner wants to hear is that the policy they have won't cover a particular need because the claim wasn't filed in a timely fashion.

David Baxter works for a residential and commercial restoration company in Florida. Baxter remembers a client who waited more than a month to report water damage in his home.

“When the mold set in, and he decided to call, his insurance didn't cover him because it was outside of the 14-day window required for reporting the problem,” Baxter told Fox Business.

Select the right deductible

Your deductible is the cost you will pay for repairs before your insurer comes in to pay its portion.

If you select a $500 deductible, you would only file a claim for damages that would cost more than that amount. The higher deductible you choose for your plan, the cheaper your monthly rates should be. Higher deductibles are often good ideas for families that have emergency funds available to them.