When purchasing a Portland home, your mind is probably filled with the details of the mortgage and the move. What kind of homeowner insurance
you're receiving may be the last thing on your mind, but here's why it
shouldn't be. Types and amounts of coverage vary considerably from
policy to policy and company to company. Imagine how desperate you would
be in the case of a total loss of your home, and you can begin to
understand how important this choice is. You should never lose sight of
the fact that it is your decision, and an important one to protect your
number one asset.
How much would it cost to
replace your belongings contained in the home? These and other questions
should take center stage when selecting a home insurance policy.
You need to know how the homeowners insurance company will determine
the value of your Portland home, what is covered including the property in the
home, and the level of liability coverage for damage accidentally caused
to your home or someone else's property.
The homeowners insurance company may determine the worth of your home
several ways. Be sure you know which method they will use and how it
could affect the amount you would receive in case of a total loss. The
worth of your Portland home can be expressed as both replacement cost and actual
cash value. Replacement cost expresses the expense to rebuild or buy a
comparable home and comparable items to those that were lost. Actual
cash value expresses what the home and the items themselves are worth. This is more potentially problematic for items such as clothing, as
apparel can lose nearly 100% of its value immediately after purchase.
The second consideration has to do with whether the insurer plans to
value your Portland home at the time of policy or at the time of loss. You should
consider this carefully, because appreciation of homes varies greatly
from region to region and year to year. You will also want to consider
how long you plan to live in the home and hold the policy. If you expect
your home's value to stay at about the same level or go down before you
move out or change your coverage, you'll want to have your coverage
based on the value at the time of the policy. If you expect the value to
increase rapidly and remain high until you move out or restructure your
coverage, then a valuation at the time of loss will suit you better.
Your insurer may or may not offer more than one option for valuing your Portland
home, but you can shop around and find an insurer who will value using
the method you desire.
Do you need extended coverage? You should know how much coverage your
basic homeowners insurance includes for items in your Portland home. If you have
jewelry, expensive electronics, silver, or other things of high value,
ask yourself if your coverage would replace these items as well as all
your other belongings. If not, you may be wise to purchase extended
coverage to cover the most valuable items.
How much should be allotted for accidental damage to your Portland home or to
someone else's property? Your insurance agent can give you some insight,
but ultimately the choice is up to you. This is one of the more
overlooked, but equally important, parts of your homeowners insurance
You can discuss your options with your insurance agent, a financial
planner, and even friends and family, but be sure in the end that you're
making the decision that is best for you. It is your home, after all,
and home insurance offers you the peace of mind you should demand when
making such a large investment.