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5 Things to Know About Buying Homeowners Insurance

Like most other types of insurance, homeowners insurance is one that is important to buy, but may never be used. Many mortgage companies require homeowners to purchase insurance on their home in case of damage by unforeseen circumstances like fire or natural disaster. It is possible to purchase cheap homeowners insurance in West Palm Beach. Consider these five things that are good to know when buying this insurance.

Exclusions to Coverage

Unfortunately, there are incidences that are excluded from coverage under most homeowner's policies. These include flood or earthquake damage, and if coverage for these occurrences is desired, added insurance will need to be purchased. Neglect and failure to maintain the property are usually not covered by this type of policy either, which is a large incentive to stay on top of all maintenance problems before they get out of hand.

Replacement Cost

Most policies have a maximum dollar coverage, meaning that in case the home is destroyed, the policy will only cover up to that dollar amount. It is important to be sure that the maximum coverage being paid for is enough to cover the entire amount that the home is worth. Otherwise, the payout may not be enough to cover the loss.

How Cost is Calculated

Renters insurance and homeowners insurance are calculated differently. Renters insurance is based solely on the value of the property inside the home. However, homeowners insurance covers what is inside the home, plus the value of the structure itself. Other factors are in play as well, including the home's proximity to natural disasters, geographic location, and even the quality of water pressure available in the area.

Replacement Values

There are two kinds of coverage options available when it comes to replacing the valuables in the home if they get damaged. The first will cover the replacement value, meaning that if an appliance were to be damaged in some way, the policy would cover a brand new replacement. The other kind covers the actual value of the item, meaning that anything needing to be replaced will be considered based on what was paid for it and how much the worth has depreciated over time. Replacement value coverage is obviously going to be more expensive, but may be worth it in the event that valuables that are lost are covered completely by the policy instead of needing to be paid for by the homeowner.


Homeowners insurance generally covers accidents that happen to other people on the property being insured, including medical costs, court costs, and awards by the court. However, there is usually a limit to the amount that will be paid out, so it is important to be aware of these limits, especially in the event that there are significant assets in play. When it comes to cheap homeowners insurance in West Palm Beach, it is crucial for the homeowner to be aware of all the limitations of the policy before signing.

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