Becoming Savvy About Homeowners Insurance In New York

Becoming Savvy About Homeowners Insurance In New York

Homeowners insurance should be reviewed annually to ensure that the appropriate amount of coverage is in effect. The amount of insurance can be lowered in a declining real estate market, or increased if home repairs or additions have been implemented that raise the value of the home. Understanding how to read a homeowners' insurance policy can be difficult. To gain a better understanding of homeowners insurance New York residents can read the following information and speak to their insurance agent.

Homeowners' coverage is broken down into two basic sections: property and liability. The property section covers the actual dwelling, other structures, personal property and loss of use expenses. The dwelling itself should be insured for no less than 80% of its value or the total amount still mortgaged through a single lender or multiple lenders. Other structures include any detached building on the property such as a garage or shed, or fixtures like driveways, side walks, patios, decks or fences. Personal property includes the belongings in the house, with certain restrictions. Loss of use coverage takes effect when an incident occurs that leaves the homeowner displaced from his or her home during repairs. The loss of use insurance covers the costs above normal living expenses that are accrued for a limited time, which is generally one year.

Property coverage can be calculated based on the actual cash value or replacement value of the home or personal property. The actual cash value is what the property is worth at the time of the loss, while replacement value is the cost to buy the property new at current market prices. Although replacement value coverage will result in higher premiums, to get the most benefit from their homeowners insurance New York residents should consider their needs in case of an emergency. Calculate if actual cash value would be enough to get by on or if replacement coverage is worth the additional monthly premium. In addition, if a person is a collector of art, jewellery, electronics or other expensive items, a separate rider should be added to cover these items in full.

The second section of a homeowners' policy addresses liability. Liability insurance covers claims or lawsuits against the homeowners if a visitor has an accident on the property as well as medical expenses for the injured party. It also protects the homeowner if damage is done to another person's property. Common instances of this type of claim occur when a child or pet breaks a neighbour's window or damages an expensive rug.

It is important to understand the particulars of a homeowners' insurance policy fully before an incident happens. Finding out that coverage is lacking after the event has happened can be costly. To become perceptive about homeowners insurance New York residents should read the fine print of their policies and when in doubt, always ask questions of their agent.

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