The Basics on Insuring Your Property

Owning a real estate whether it is your personal home or a form of investment can be a big responsibility in terms of insurance. As the property owner, you need to obtain the value and type of insurance you need for your property. But then, a lot of people are not much aware on how the basics of insurance actually work. Then, the real problem appears when problems take place such as a law suit or slip and fall incidences. In such cases, not having the right insurance or coverage could lead to lots of money you need to spend.
So, you should learn about the basics of insuring your property if you are planning to acquire one. Two of the most important points are the following: physical assets coverage and lawsuit or liability coverage.
About Physical Assets
Basically, you will be required to renew your insurance policy every year especially when it comes to the limits of your coverage in case the physical assets get destroyed. Typically, the limits are listed on the declaration pages of the policy. For instance, if you own a 3,000 square foot property or building and it actually cost $75 every square foot to rebuild each foot, you should acquire at least $225,000 as dwelling coverage. You must remember that the structure is the only item covered by the policy, not including the lands since it is not usually destroyed.
In case you have detached structures like garages, pools and other essential items like appliances, you need to request that your insurance agent sum up the entire value of these and obtain ample coverage for all your declared assets.
In case you only have $150,000 coverage, but rebuilding and replacing your assets cost $225,000, you will only get $150,000 from the insurance company and nothing more. You will need to spare your own cash in order to rebuild your property even if you have a policy. Hence, it is advised that you have your declarations page reviewed and ensure you have adequate coverage according to the actual cost of rebuilding.
About Liability Protection
Insurance also gives liability protection when you are facing lawsuits opposed to the property. For instance, if you have a tenant who happens to own a dog and this dog bites a kid in the neighborhood, you will be sued too. When this happens, the insurance company will meddle and offer a lawyer to defend, negotiate and settle a judgment according to the coverage limits of your policy.
So, in case you have a $400,000 liability coverage, this amount is the highest they will give you and you will have to shoulder the rest. With this, you need to come up with an estimate of the net worth along with your earning potential to ensure that you have enough liability coverage in case the worst happens.
These are just the basics about insuring your property. It is a must that you review your policy very well to make sure you have the right kind of insurance and amount of coverage at hand in case unfortunate things happen.

About the Author:
Jeanette Todd works for Aruba Palms Realtors and loves to travel. She loves to write, Aruba Realty and Real Estate Businesses are his topics of interest and he finds immense pleasure in writing article about Homes Aruba.

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