Purchasing a Home is an expensive proposition for most Americans. But once this hurdle is crossed the next task is searching for and obtaining insurance to protect this valuable investment.
Home insurance in Alabama may not be required legally but if you plan to mortgage your home for whatever reasons, your lender may require some amount of insurance on your home.
The best way out is therefore to be responsible and make your own decisions about insurance.
Who can buy Home Insurance?
Owners: to protect both your house and personal property.
Tenants: to protect your furniture and other personal property.
Everyone: This is aimed at extending protection against your liability if you cause an accident that injures other people or damages their property.
The kind of covers offered to homeowners comprise of a package of liability and property coverage. In addition to what is a basic or a standard policy you may be inclined to purchase an extended policy as well. Policies to protect your home against fire, mold, and floods will need to be purchased separately. Each state has a department for insurance, which caters to the special needs of the residents. You may contact your state’s department in connection with any special conditions of programs in your state.
Types of Insurance policies:
Essentially there are 4 types of insurance policies, which you can opt for. These can then be customised to suit your profile.
The Basic Form extends coverage to both your home and personal property. Personal property refers to your personal belongings and your furniture. The policy covers damages due to named perils like:
- Fire
- Lightning
- Removal of property endangered by peril
- Windstorm or hail
- Vandalism or malicious mischief
- Theft
- Damage from vehicles and aircraft
- Explosion
- Riot or civil commotion
- Glass
- Breakage
- Comprehensive liability
The second alternative is to opt for the Broad Form. The kind of cover is the same as The Basic Form. However there are some extras like additional coverage for damages caused by threats such as:
- Building collapse
- Freezing of, or accidental discharge of water or steam from within plumbing
- Heating/air conditioning systems
- Domestic appliances
- Falling objects
- Weight of ice, snow or sleet
- Rupture or bursting of hot Water heating systems
- It also provides comprehensive personal liability coverage
The third option is the Special Form. This covers all threats except for those, which are not names explicitly in the policy. Examples of exclusions are earthquake and floods. No insurance policy covers these 2 perils. You will need to purchase these policies separately. The Special Form also includes the same protection as The Broad Form.
If you are a tenant or a renter and need to insure your unit then the Tenants Broad Form is for you. It covers the entire personal property of a tenant, but there is no coverage for the dwelling since it is not owned by the individual.
The Comprehensive Form is the fifth option. It covers both the dwelling and personal property against all risks for situations, which have been explicitly excluded from the policy. This type of policy is generally more expensive because of the amount of coverage available.
The Special Condominium Form covers the interiors of your residence and personal property. This plan is designed for owners of a condominium. Though this is not offered by many insurance agents / carriers, and does not cover the building structure as a whole, you may find this to be useful if you need to protect your unit.
But be sure to know what your insurance policy does not cover; in the event you need additional coverage.
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