*Metro Albuquerque NM Real Estate: Homeowners Insurance: The Basics*
The information on this page has been provided by people involved in the insurance industry.
Information has been obtained from sources deemed reliable and not guaranteed by this website.
Homeowners Insurance: The Basics
A home is probably the most valuable asset you will ever own, so it must be protected with adequate insurance.
Homeowners insurance policies should help pay for replacing or repairing damaged, destroyed or stolen property
and belongings. Likewise, it should protect against liability resulting from an injury or property damage around the home.
As some homeowners unfortunately learn, earthquake, hurricane, and flood damage aren't necessarily covered by their policy,
and may need to be purchased seperately.
"Actual cash value" coverage pays the value of property or belongings at the time they were lost, taking into account
their age, depreciation, etc. "Replacement cost" coverage provides enough money to replace lost or damaged property or belongings
with new ones. Usually there are replacement limits on certain expensive items, such as furs, jewelry, etc. When selecting a
policy, homeowners ought to calculate the cost of rebuilding their home after a major calamity. That amount is probably more
than what most people consider their home's current market value. Remember, your land is a part of your property's value, but the
value of the land is usually subtracted from the amount of insurance needed for a home. Even if a home is totally destroyed, the land
is not effected and is still available to be rebuild on. In other words your insurance needs to cover rebuilding your home, but not
replacing the land under it.
It is wise to keep a record of a house's contents, noting their value, date of purchase and description. One tip is to photograph or
videotape the home and it's contents; remember to keep a copy of the photographs or videotape in a location other than your home.
If the home is damaged or destroyed, the photographs or videotape may also be damaged or destroyed.This information can be
used to document to your insurance company the items that need to be replaced if items are destroyed or stolen from your home.
Most insurance companies will do a yearly review of your home's coverage, do not put this off any additions or improvements
need to be included in your coverage, and homes are appreciating each year in the Albuquerque market. Make sure you keep
your insurance coverage current, not only do you need it to protect your home and its contents, but if your home has a mortgage
your lender will require you to have it at closing and during the life of the mortgage. If you allow your insurance to lapse, your lender
will provide their own insurance for your home, at your expense, and in most cases it costs more than the insurance you obtained on
For more information, contact your insurance agent; they'll be glad to sit down with you and go over your home insurance policy.
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The information on this page is presented as a service by Patrick Montrose - Realtor.
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