When you buy a new home, you inevitably insure it against any disaster. We’re all aware of how a fire or natural disaster could destroy a home no matter how safe. It’s such a huge investment that, without insurance, something like this could be financially ruinous.
However, home insurance does not necessarily cover your personal property inside of your home. While the value of the belongings won’t come anywhere near to the value of the house, replacing everything is near impossible unless you have a fair amount of savings available.
For this reason, insuring your personal belongings inside your home is incredibly important. Unlike the home itself, however, you have to think more about the details. Specifically, there are different kinds of insurance that will suit different people with various belongings they want covered.
Let’s take a look at 3 different types of insurance you should consider.
Household content insurance (aka personal property insurance)
To protect yourself from financial ruin in the case of a catastrophic event like your house burning down or a flood, household content insurance can cover your losses. This type of insurance is called “content insurance” but is sometimes referred to as “personal property insurance”.
With this type of insurance, you’d get a comprehensive payout for the contents of your home in addition to the home itself.
Of course, the payout itself will depend on a valuation of your household contents. This kind of valuation is almost never the actual amount you think your property is, but it should provide you with some resources to start again and replace your lost property.
Insurance for individual items
There are certain individual items for which you might consider getting a dedicated insurance policy. For example you might buy a dedicated insurance policy on jewelry, diamonds, or antiques.
Other stuff like smartphones, tablets, laptops – could cost thousands of dollars are often good items to consider insurance as well. I’m sure the last time you were at an electronics store, they asked you if you wanted to insure your item. Since these items are easily stolen or broken, it may be a good idea to insure each individually instead of relying on a personal property insurance plan.
Home warranties provide a different kind of insurance. Unlike homeowner’s insurance, home warranties cover maintenance and repairs of major household fixtures. You can think of a home warranty like insurance for your home appliances.
Home warranties do not pay out an amount in case of disaster. Rather, they provide you with the funds and services to fix any problems as they arise. People buy home warranties because maintenance and repairs are an expensive part of owning any home, no matter how new.
You can get plans that cover the major systems issues – such as electricals, plumbing, and HVAC – and plans that cover appliance repairs. You can also get combo plans that cover everything.
The difference between household insurance and home warranties is that the former helps after an unexpected event, while the latter will be useful when inevitable wear and tear happens.
The ideal scenario would be to get all of the above kinds of insurance for your household contents. However, the costs of monthly premiums do add up, and you are better off deciding which are most likely to come in handy, and what you are likely to need most.