A basic homeowner’s insurance is often not enough to protect you, the homeowner, and your home from different perils that await you. For this, it is important that you update your homeowner’s insurance coverage from time to time. This will enable you to properly protect yourself from the financial gaps in your insurance coverage. It will also prevent you from paying too much money out-of-pocket when you have to settle a claim.
Many insurance companies provide multiple homeowners insurance policy options for customers in need of a higher level of protection. The following is a list of the reasons why you may need a higher level of insurance protection:
- You have a custom-built home
- You have unique risk exposure
- You own significant financial assets that must be protected
- Your home will cost between $500,000 and $3 million to rebuild completely
- Your home is fitted with sophisticated electronics and appliances, custom cabinets, marble countertops, valuable collections, etc.
The various home insurance options that are available provide you the chance to include additional coverage to your existing policy without any complications. Some of these options are:
Extended Dwelling Coverage
Often, a home’s full reconstruction costs differ from its market value. In these situations, the policy you purchase may not fully account for the real cost of rebuilding your home. To remedy this, you can purchase extended dwelling coverage.
The extended dwelling coverage is an insurance policy that enables you to rebuild even when construction or other related costs increase. It may also help you pay for contractor costs, architect’s fees, debris removal, construction fees and permits, and others.
Replacement Cost Up-front Coverage
Sometimes, you don’t want to rebuild your home in the same location where certain perils damaged it. To do this, you need to purchase a replacement cost up-front coverage. This coverage gives you enough payout to purchase a new house or even build a new one in a new location.
Building Ordinance or Law Coverage
There are times when your home experiences damages or losses due to covered perils. When these happen, you need to rebuild or repair your home. However, you must ensure that you do so in line with current building codes. Unfortunately, these codes change, which could mean an increase in rebuilding costs. With this coverage, you will be able to cover any change in rebuilding costs that may have occurred.
Personal Property Replacement Cost Coverage
Sometimes, you need to replace your personal belongings, such as electronics, jewelry, art, furniture, etc. The value of these items constantly changes. Hence, they may cost more than their initial price. With this coverage, you can replace the specific belonging with an identical or comparable one.
In conclusion, the basic homeowner’s insurance policy might not provide adequate protection. Fortunately, purchasing additional insurance coverage is guaranteed to protect you and your home from numerous perils. Apart from the coverage mentioned above, there are several other additional coverages you should be aware of.