For many homeowners in Southern California, property insurance is a formality or a hard requirement to keeping a mortgaged roof above their heads. This misconception can be blamed on lenders’ handling of the loan process, which is focused on speed and rushing the parties to the closing table. Mortgage lending banks will mention homeowners insurance once during the approval process and once again prior to closing. If borrowers don’t spend time with their insurance agents and learn about their policies, they won’t be aware of the following details, shared by the experts of homeowners insurance National City residents prefer.
A Policy in the Form of a Contract
The wording of a home insurance policy includes declarations, provisions, clauses, limits, and exclusions that bind the insurer to cover homeowners should specific situations arise. In essence, the policy is a contract between the insurance company and the homeowner, and it may be difficult to understand for someone who isn’t an attorney. However, insurance agents are familiar with the language of policies and can explain every detail of the contract to homeowners.
The structure containing all the attached living spaces of a residential property is known as the dwelling, and it’s the most important aspect of coverage, at least for mortgage lenders. Dwelling protection entails providing coverage against specific risks, the most common being fires. In some cases, detached structures such as tool sheds may be included in a policy, but an outdoor kitchen located on the far side of a swimming pool may require special inclusion or a rider.
Personal Property Coverage
Furniture, appliances, and other personal belongings are also included in most property insurance policies, but the coverage amounts tend to be much lower. In case of a fire, catastrophe, or theft, a certain value portion of the items lost may be recovered once a claim is approved. This coverage is standard, but it can be enhanced to achieve peace of mind. Optional coverage for personal property can be increased to maximum limits.
Similar to personal property coverage, this standard feature covers accidents to visitors and other third parties who may be injured in the property of the insured. The idea is to provide coverage for medical expenses resulting from an injury. Homeowners who plan to host pool parties may need to increase their liability coverage since these events tend to be riskier.
Limited, Intermediate, and Comprehensive Coverage
All mortgage lenders require at least HO-2 coverage, which features various limits. Others require HO-3 coverage, but homeowners should evaluate HO-5 comprehensive policies, particularly if they have antiques, smart home automation systems, valuable wine collections, home offices, or other considerations that may not be covered at the HO-2 or HO-3 levels. While comprehensive home insurance may result in higher premiums, savings will be realized through lower deductibles and higher payouts.
If you’re still renting and not ready to own a home yet, make sure you have adequate renters insurance. National City families can contact Altra Insurance Services today for all their insurance needs. Call (800) 719-9972 to receive a free quote from one of our friendly agents.