Welcome to professrsavings.com, we teach finance basics.
Hi I’m your host Rayfil Wong.
Today we will teach you home insurance and why you need it explained
in about two minutes.
Home insurance is a policy that provides financial protection against the potential losses you could experience.
This can include both structural damage as well as possessions during incident.
Pleas consult an insurance agent for more detail. Generally home insurance policy can cover fire, theft, and natural disasters.
Home insurance policies are structured to compensate the homeowner after they experience a financial or material loss that is more than the policy’s deductible.
Benefits can be paid as in a few ways. What we call actual value or replacement value.
For instance, if someone breaks into your home and steals your $3000 fifty inch television.
If your benefits are paid in actual value, it means that you will be reimbursed the estimated value of the television you lost which includes factors like depreciation.
If your policy calls for a replacement value, you will be paid an amount that will enable you to replace the items you’ve lost with comparable items.
The structure of your property, also referred to as the “dwelling” is ensured up to a dwelling limit.
So make sure that your dwelling limit is at least equal to the cost to rebuild a home. In this case, do some homework and find out how much it takes to rebuild your home.
Why? Because if your dwelling limits are greater than the cost to rebuild, you will not be paid the extra amount.
Again, consult your insurance agent for the specific terms as we are hereto only provide the basics of home owner insurance.