When you shop around for homeowners insurance, you’ll have to make a series of decisions. You’ll have some flexibility when it comes to the types and amounts of coverage you choose.
You might decide to purchase additional coverage that’s not included in a standard homeowners insurance policy. Your house’s location will be a key factor that will influence your decision-making process.
How Your Home’s Location Can Affect Your Insurance Needs and Premiums
Homeowners insurance can pay to repair your house if it gets damaged or rebuild it if it gets destroyed. It can also pay to replace personal belongings that get damaged or destroyed.
A homeowners insurance policy only covers damage that’s caused by certain types of events, known as perils. Policies generally cover things like storms and fires but exclude events like flooding and earthquakes.
If you own a house that’s near a body of water and at risk of flooding, or if your property is in a region that’s known for seismic activity, a standard homeowners insurance policy won’t be enough to adequately protect you. You can add an endorsement to a standard policy or take out a separate policy so you’ll be covered if your house gets damaged or destroyed by a flood or earthquake.
That additional coverage might add a lot to your premiums, but consider the alternative. If your home gets severely damaged or destroyed by a peril that your standard homeowners insurance policy doesn’t cover, you’ll have to figure out how to pay for repairs or rebuild the house on your own.
How to Find the Right Coverage for Your Location and Budget
If you’re currently looking for a new home, ask your real estate agent about the threat of natural disasters in the area. If a house is at risk for something that’s not covered by a standard insurance policy, you’ll need to purchase additional coverage.
When you research homeowners insurance policies and premiums, get quotes from several companies. You might find large differences from one insurer to another. If you bundle two or more policies or qualify for discounts, you might save a significant amount.
Before you decide whether to buy a particular house, consider the total cost of ownership, including insurance premiums, and make sure you can afford it. Think about your mental health and quality of life, too.
Knowing that your home is in an area that’s susceptible to flooding or earthquakes might be a constant source of stress and anxiety. Buying a different house in an area that’s less at risk can give you greater peace of mind and save you money on your insurance premiums.
