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Home insurance is essential. Without it, your home—whether you buy or rent it—faces considerably more risk that will ultimately hurt your wallet more than it could. To buy it for your property is to protect yourself and the home in the event of an accident, extreme weather, or vandalism. When going through different companies to find a policy, keep these tips in mind to ensure what you do buy is your best fit.


Decide the amount: How much or how little coverage you need will determine how much your insurance plan will help you should a disaster strike. Some lenders will decide the requirements for your policy, including buying a policy that covers the mortgage cost, but you’ll generally pick the coverage amount. Note that any contents and personal property in your home will be taken into consideration when it comes to the price of your insurance policy.


Replacement cost vs. cash value: When picking an insurance policy, you’ll be given the option to either insure the belongings in your home for replacement cost or for actual cash value. This is the difference between the cost it would take to repair your home or replace items with or without depreciation deduction. If you choose to go for replacement cost, remember to insure your home for at least 80% of its replacement value.


Shop around: Don’t feel like you need to stick to one company because it was recommended. There are plenty of resources available that let you compare the price of an identical product for two different insurance companies, along with other insurance-related needs. Places that offer unbiased help include your state insurance department, consumer publications, and your local public library.


Read your policy thoroughly: This is crucial. Signing for a home insurance policy means you’re signing a legal contract. These contracts will list your rights and responsibilities as an owner of this policy, as well as the rights and responsibilities of the insurance company itself. As with all legal documents, read through the document carefully and make sure you understand all that’s written within it. Once signed, tuck your policy away in a safe location along with the name of your insurer. 

Review it every year: New additions or remodeling done to a property can potentially increase the replacement cost of your home. Review your policy every year to be sure that your insurance still adequately covers your home and belongings.