That feeling of signing your name away on that piece of paper will be like no other thing you experience. Purchasing a home is one of the most significant steps you will take in your life. If you have recently purchased, or are planning to buy, a house in the Philadelphia, PA area there are many things to consider when it comes to purchasing homeowner’s insurance. Here are seven things you should know before buying homeowners insurance.
- You Need Homeowner’s Insurance – If you paid cash for your Philadelphia home, then there was no mortgage company which required you to have insurance. You should still obtain it, regardless of your situation. Aside from the apparent coverages for your property, liability protection can be tremendous. If someone is on your property, for whatever reason, and they slip and fall you could be brought into a lawsuit. Your homeowner’s insurance will come into play to help defend you and possible pay any settlement or judgement.
- Replacement Cost VS Actual Cash Value – The terms “replacement cost” or RC and “actual cash value” or ACV, are loss valuation methods insurance companies use to determine how much money they will pay out in the event of a covered cause of loss or claim, after any deductible is applied. While both options will be available you, it is recommended that you purchase RC. ACV is replacement cost minus depreciation. When it comes to a partial loss, a reduction may not be the most beneficial to you and your home. For example, if your roof was partially damaged but needed to be totally replaced, ACV may only give you half the money you need to replace the roof where RC would provide you the full value needed limiting any out of pocket expense.
- Ask For Discounts and Get Many Quotes – Be sure to shop around and ask for discounts. Some discounts available could include multi-policy when you include your auto insurance with the same company, new home, safety features (think alarms), and claim-free. Getting quotes from multiple Philadelphia companies is recommended since they all have different coverages built into the policy, as well as various rates. While one policy may be more expensive than the other, the extra provided coverages may be most beneficial to you. Some of the best home insurance carriers in our area are Erie Insurance, GUARD Insurance, and Liberty Mutual.
- Know What Is Covered – A standard homeowner’s policy will have the following essential coverages: property, liability, personal property, medical payments, and loss of use (provides coverage for you to live elsewhere should you have a covered claim and can’t stay at your home). Some extra bells and whistles you may want to look for are replacement cost on household contents, underground service line coverage, equipment breakdown, guaranteed replacement cost on the dwelling, and water backup and sump pump overflow.
- Know What Is Not Covered – When purchasing homeowner’s insurance for your Philadelphia home, be sure to read your policy. While you may assume that everything is covered, this is usually not the case. Every policy has its exclusions, so it is crucial that you read your policy carefully. Do not be afraid to ask each company questions as well. Some of the more common typical exclusions are flood, ware and tare, neglect, water back-up, earth movement, and sink hole.
- Make Sure You Have Enough Coverage – Since each company and policy is different, be sure that you have enough coverage. Don’t confuse your homes market value with replacement cost, as these are not the same. Building material prices change regularly, and you have to take into account debris removal. With lawsuits averaging over $1,000,000, you may want to think about a higher liability limit than the standard $300,000 or $500,000.
- Be Sure to Lookout For These Things That Can Deny You Coverage – When it comes to a lot of Philadelphia homes, they were built a long time ago. That means they may have several things that an insurance company won’t like and possibly deny you coverage for. Some of these things include:
- Knob and tube wiring
- Outdated heating, cooling, plumbing, and electrical systems
- Damaged or old roof
- Cracked sidewalks
- Wood burning stoves
Homeowner’s in Philadelphia, PA have made an excellent choice in living in the area. The birthplace of America that is a big city with a small-town feel is a great place to live and raise a family. When you do purchase your home, be sure to look into all of these things before buying your homeowner’s insurance. You will be able to have a good night’s sleep in your new home if you do!
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