Home insurance extras may make for home savings

Most mortgage lenders require some type of homeowners insurance before a home loan is granted. However, a typical policy may not cover every possible disaster that can affect a home.

Those families that live in areas that are prone to flooding, hurricanes or earthquakes may want to consider bulking up their policies. While purchasing additional home insurance may seem like a burdensome expense, it may actually make for more home savings down the road, according to Money Magazine.

Comprehensive home insurance may be even more important in today's economy. Many individuals do not have the same amount of savings they once did, and a recent survey by the National Foundation for Credit Counseling found that 64 percent of respondents did not have the savings necessary to cover unplanned expenses.

Furthermore, many homes may be underinsured against disasters, according to Money Magazine. Some consumers have even reduced the amount of coverage on their homes in order to save money.

Most homeowners with a standard policy will have coverage for their home's structure, the items in a home, liability and living expenses in the event a house becomes unlivable. For most individuals, a home will be covered for structural damage caused by fire, hurricane, lightning or hail. However, flooding, earthquakes and deterioration, according to the Insurance Information Institute.

Families that live in areas prone to either flooding or tremors may want to add those types of insurance to their policies. Earthquake insurance is often available as an add-on to typical home insurance, but it may come with a high deductible in some areas. Both renters and homeowners can obtain flood insurance, and it will likely cover the cost of reconstruction and the cash value of any possessions that are lost or irreparably damaged, according to III.

While the added monthly expense may seem inconvenient, it could save homeowners from having to find a contractor and pay for pricey repairs themselves. This becomes especially important when one considers that the areas of the home most susceptible to damage during a natural disaster are the roof and windows, according to Money Magazine.

Because replacing a roof is not exactly a simple do-it-yourself job, it is essential to make sure a home insurance policy properly covers families in case of damage. Roofers may charge between $50 and $100 per hour not including materials. Adding a rider to a policy may be the best way to create home savings in the long run, according to the source.
 

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