If you own a home that is financed, your mortgage company requires that you carry continuous home insurance New York to protect their interests in the property. Scrambling to purchase insurance before you close escrow can lead to oversights and gaps in coverage. While the mortgage company may have approved your home insurance coverage, there could be huge gaps that could leave you at risk of paying out-of-pocket if a claim were to occur. Because you are not an insurance agent, you are not expected to know the ins and outs of your policy. Take out your home insurance declarations page out and look for these very important features on your policy before you assume you are automatically protected.

Of course, one of the main reasons you purchase insurance is to rebuild your home if it were deemed a total loss. What if you did not have adequate insurance to cover rebuild costs 20 years down the line? There is a special rider designed to protect you against inflation. This rider is referred to as Extended Replacement Cost. Extended Replacement Cost, also written as ERC, is included in HO5 home insurance policies automatically and can be added to other forms like the HO3. This coverage will offer an addition 20 to 30 percent of your dwelling coverage in the event your dwelling coverage is not enough to rebuild your home back to like kind and quality at the time of the claim. This generally accounts for an increase in the cost of labor and materials.

Another area all homeowners should review on their home insurance New York policy is the Personal Property section also referred to as contents. Personal Property covers all of your belongings that are not permanently fixed to the building. When you begin calculating the value of all of your belongings, you will be surprised how much you have accrued over the years. Insurance companies can pay personal property claims in two different ways: Actual Cash Value and Replacement Cost. Actual Cash Value will take the current value of your property and subtract depreciation. Replacement Cost valuation will pay you based on how much the item would cost to buy at the time of the claim. If you want to prevent coming out of pocket to get a replacement TV, you should choose a policy with replacement cost valuation.

The last area to review on your home insurance declarations page is the section titled Loss of Use. This coverage will pay you to live in another residence in the event your home in uninhabitable. Some policies will have a dollar limit, whereas, others will have a time limit. Look for policies offering 24 months of continuous coverage to give you the most protection.

Know the details on your home insurance New York coverage. If you fail to delve deeper into the policy you could end up short changed at the time of a loss. Sit down with your agent and discuss claims, additional riders, and premiums.

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