What Homeowners Need to Know: Home Insurance Coverage
Home insurance coverage is designed to protect your home and personal belongings in case of theft, fire, or natural disasters. Understanding home insurance is an important part of being a homeowner, so keep reading to learn important things about this essential investment.
Homeowner’s insurance may not be mandated by law in the Carolinas, but you can expect your mortgage company to require it. “Technically, it is our house and we have to protect it,” explains Donna Williamson, at Saussy Burbank preferred lending partner Highland Mortgage.
Williamson suggests shopping around to compare different insurance companies because they can vary so much. She also recommends keeping an eye on your home insurance rates. “Some of them go up quite a bit after the first year,” she says. Or the company might raise your rate along the way, adding something onto the policy you don’t need (e.g., wind and hail coverage or flood insurance).
Homeowner’s insurance typically covers the structure of the house, personal belongings, additional living expenses, and liability protection. Liability coverage is critical as it provides protection against claims of property damage or bodily injury caused by the homeowner or their family members.
Your premiums reflect the type of coverage, the location of your home, your credit score, and your deductible amounts. The deductible is what you would be responsible for paying before the coverage takes over. Higher deductibles generally lead to lower premiums, but you should make sure that you can afford to pay the deductible in case of an incident.
It’s also important to understand what your home insurance policy doesn’t cover. Some common exclusions include floods, earthquakes, mold, and some types of water damage. You may need to purchase additional coverage or riders to your policy to cover these risks. Insurers are also not going to protect your home from damage caused by poor maintenance or intentional acts.
It’s a good idea to get an idea of how the claim process works and what steps you’ll need to take. Plan to report any loss to your insurance company as soon as possible and provide any necessary documentation to support your claim. You’ll also want to keep detailed records of all communication and interactions with your insurance company.
North Carolina has specific rules and regulations regarding home insurance. Your policy in North Carolina must cover the full replacement value of the dwelling, which is the cost to rebuild the home in the event of a total loss. The insurance company must provide a written estimate of the replacement cost to the homeowner at least once every three years.
Also, homeowner’s policies in the state are required to offer coverage for wind and hail damage, with a separate deductible. You may have the option to choose a higher deductible for wind and hail damage to lower their premium.
If you’re in a flood-prone area, you will be required to purchase a separate flood insurance policy through the National Flood Insurance Program (NFIP).
Good news? North Carolina allows insurance companies to offer discounts for certain safety features, such as smoke detectors, deadbolt locks, and fire extinguishers. The state also requires insurance companies to offer discounts for policyholders who have installed certain wind mitigation features, such as hurricane shutters or reinforced garage doors.
North Carolina law also requires insurance companies to provide a 45-day notice of cancellation for non-payment of premium, and a 60-day notice for any other reason. The notice must be sent by mail or electronic means and must include the reason for cancellation and the effective date.
Similarly, South Carolina has its own regulations regarding home insurance. As in North Carolina, insurers in the state must offer coverage for wind and hail damage, with a separate deductible for these perils. The homeowner may have the option to choose a higher deductible for wind and hail damage to lower their premium.
Homeowners in South Carolina’s flood-prone areas area also required to purchase a separate flood insurance policy through the National Flood Insurance Program (NFIP).
The state has some protections in place too. South Carolina law:
Home insurance is one way to help financially protect your home in the event of damage or loss. This article has covered homeowner insurance basics as part of of our Important Things Homeowners Need to Know series. Keep an eye out for our next installment. In the meantime, take a look at our newest properties we’re building in the Carolinas.
