Know Your Home Insurance Policy Inside Out

When purchasing a home through a mortgage lender, it is mandatory that the homeowner buys prolonged home insurance New York. The reason for this is because the lender wants to protect their stake in the property. Homeowners usually decide to buy this insurance before closing escrow. This rush to find insurance quickly may cause errors and mistakes in the insurance coverage. The mortgage company will usually approve the coverage when it is presented; however there is the possibility that there are oversights that may leave the homeowner stuck paying the bill in the event of a claim. It is important to look at the home insurance declarations section of the coverage and look for some important areas which this article will explain in more detail. This is important to make sure to you are fully protected. Home Insurance New York

The primary reason for purchasing home insurance is to make sure that your home could be repaired or reconstructed in the case that some loss or damage occurs. It is important to consider the possibility of rebuilding costs even 20 years from now. To protect against the effects of inflation, there is a rider designed to deal with this. It is known as the Entended Replacement Cost (ERC). The ERC is attached to home insurance policies by default especially HO5 coverage. It can also be added as an addition to policies such as the HO3. This coverage feature offers an additional amount of coverage, usually 20 to 30 percent, which is helpful in the event that the initial coverage is not enough to rebuild a home back to its original design and quality. Usually the ERC is good protection against the cost of labor and materials which may increase due to inflation.


The contents section of the home insurance new york policy, also known as the “Estate” section, should be reviewed by all homeowners. This is also referred to as personal property. The estate section is important because this includes all the things on the property that are not a part of the structure. Many people are amazed when they begin to calculate the value of their belongings that have accumulated over the years. Estate claims are paid by insurance companies using two methods. One is Fair Market Value and the other is Replacement Cost. Real Cash value is defined as the current value of your property minus loss of value. Replacement cost valuation is an estimation of how much the item is presently worth as if it was bought today. To avoid spending your own money for a replacement appliance, the best choice is to choose coverage with placement cost valuation.

The last part of the coverage needed to be looked at carefully is the section called Loss of Use. This protection will pay the policyholder to live in another location in the event that the original home is not fit to live in. an example would be a fire-damaged home. Some coverage offers a limited payment amount while others only cover a specific amount of time. For the most protection, find coverage that offers at least 24 months.

It is important to know all aspects of your home insurance New York coverage. It is important to look at your insurance coverage in detail to avoid huge problems in the event of theft, loss, or damage. Make sure to discuss with your insurance broker about premiums, riders that can be added to the coverage, as well as the types of claims available.

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