Homeowners Insurance Is Necessary

Some new homeowners are overwhelmed with the closing cost and down payments when purchasing their new home.  As a homeowner, there are a number of additional expenses they will be required to pay, such as, maintenance and insurance, etc.  Most home buyers do not pay 100% cash for their new home; therefore, will be required by the lender to purchase some sort of dwelling fire or homeowner's policy.  When you shop for homeowners insurance, you need to be aware there are many different types of policies with different levels of coverage for the homeowner.   The homeowner has a choice of how much self-insurance they are willing to assume, which is defined by the deductible.  Deductibles are normally defined as a total dollar amount, or a percentage of total amount coverage within the policy. As policyholder, you will be required to pay the deductible amount for each claim occurrence.    It is important for the buyer to understand this concept and your exposure in case of a claim.  Another aspect concerning insurance, a buyer needs to understand, is how to read a homeowner's policy.  There is an easy way to remember how this is done; remember the word DICE.  The ‘D' stands for declaration which usually is the first page of the policy defining your coverage and amount of premium you must pay.  The ‘I' stands for the insuring agreement section; this defines all the coverage that is available.  Next, refer to letter ‘E', this defines the exception section within the insurance policy.  This is the most important section; the insuring agreement gives you the coverage, and exception section takes the coverage away.  Therefore, if the coverage is taken away in this section, you do not have coverage for that peril.  Finally, the letter ‘C'; this is the condition section.  This section defines how the claimant should cooperate with the insurance company during a claim.