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loan, no lender will finance the purchase of a home that is uninsured against<br />
damage or loss.<br />
Homeowner’s insurance policies can cover situations ranging from a thief<br />
making off with one valuable item, to serious structural damage in the event<br />
of a fire or the like, to liability cases if somebody is injured on your property,<br />
so getting appropriate coverage is invaluable.<br />
Start by obtaining quotes from multiple insurance agencies, but verify that<br />
the companies they are quoting from are reputable. What is their pay-out<br />
history like: do they give customers a hard time when processing claims, or<br />
is the process smooth and quick? How long has the company been around?<br />
Websites such as JD Powers and A&M Best give ratings to insurance companies<br />
and are a good source to check before going with a specific company.<br />
Here are some of the basics to know about homeowner’s insurance:<br />
Structure/Dwelling: Insures the structure of your home for a set amount, usually<br />
the amount it would cost to rebuild a comparable home at today’s costs.<br />
Personal Property: Insures the contents of your home up to a certain dollar<br />
amount. Keep in mind that typical policies do not cover the mysterious disappearance<br />
of valuables like a diamond ring or silver; these items often need to<br />
be insured individually after getting appraised. There are various add-ons that<br />
insurance companies offer to their basic policies to insure things like jewelry<br />
and silver. Some companies offer blanket coverage on valuables for a specific<br />
cost, and some insure each item separately; ask your agent about this.<br />
Replacement Cost: If a company guarantees replacement cost, that means<br />
that they will replace the damaged item with a new one at its current cost. The<br />
alternative, Actual Cash Value (ACV), covers only what the item was worth at<br />
the time of the damage, taking depreciation into account. If a 20-year-old roof<br />
is destroyed in a fire, its ACV will be much lower than its replacement cost.<br />
Flood Insurance: Flood insurance is not included in a homeowner’s policy. In<br />
documented flood zones, lenders will require flood insurance, but otherwise<br />
it is optional. Bear in mind, though, that floods can strike anywhere; 25% of<br />
all flood damage claims come from areas that are not high-risk zones.<br />
Sewer Backup: Optional add-on coverage that speaks for itself.<br />
WE ARE PROFESSIONALS. From start to finish,<br />
the Madison team is poised to deliver the highest<br />
level of professional service.<br />
732.905.9400 • WWW.MADISONTITLE.COM<br />
2017 Lakewood Home Buyer’s Guide | 71
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