There are a number of basic homeowners insurance policies to choose from as you contemplate what different type of homeowners insurance is best for your situation. Homeowners insurance is a type of insurance policy intended to cover repair or rebuilding of your home if it is damaged. It is also something you should not go without as your home is likely the largest investment you have. Most mortgage lenders actually require some form of homeowners insurance as a prerequisite to approving a home loan.
Homeowners insurance policies are generally broken into a few categories. The first category consists of basic homeowners insurance policies. These policies are fairly basic and cover a limited number of situations, such as fire, wind, storm, hail, ice or lightening damage. These policies may also cover such situations as aircraft damage, civil unrest, damage caused by vehicles, vandalism, theft and damage related to structural defects. These policies also may cover water damage, damage from objects falling on the home and damage related to electrical problems. Depending on where you live, however, you may be required to purchase flood or earthquake insurance separately. This is the least expensive category of homeowners insurance. It also carries the greatest risk as it often leaves homeowners vulnerable to paying additional money to cover situations not contemplated by their basic policy.
The next category of homeowners insurance policies consists of extended homeowners insurance. As the category suggests, these policies extend beyond those occurrences covered in the basic category. These policies cover a more comprehensive list of disasters and home damage and offer more comprehensive protection for homeowners. However, the added protection might not outweigh the additional premium.
Finally, for ultimate coverage, consider a complete homeowners insurance policy. These types of policies not only cover an expanded list of situations but also often cover the home's contents and may cover detached buildings, such as sheds and garages. Again, the cost might be prohibitive so research what are the different types of homeowners insurance carefully before choosing a type of homeowners insurance that best fits your situation.
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