Homeowners insurance is always the topic of conversation when you are planning on a location to buy your first home. But what exactly is homeowners insurance? Insurance is the act of transferring risk of loss of your home or property to a company. Instead you pay a premium and, depending on the deal you strike, the company takes care of damages when it comes to that loss we just talked about. Also, if you are looking for a horse property for sale in Colorado, contact Colorado Horse Property today and speak with one of our horse-person realtors.
A deductible is the amount you pay out of pocket before the insurance begins. Deductibles can be a specific dollar amount or a percentage of the policy total. So what is all the hype about homeowner’s insurance? What a homeowner’s job is when it comes to insuring their home is finding a balance between risk of loss. Also, how much of a premium and deductible can they afford?
What Is Homeowners Insurance?
One way that insurance companies try to manage their premiums is by adjusting the cost of your deductible. So the homeowner has to decide if they would rather have a lower deductible, resulting in less money out of pocket if they incur a loss. Otherwise, a higher deductible will lower premiums but require that the homeowner pay a larger amount upfront. Confused?
Here’s an example: let’s pretend that a small kitchen grease fire has caused around five thousand dollars worth of damage in a three hundred thousand dollar home. If your home insurance policy specifies a two percent deductible then the five thousand would not be covered. As a homeowner, you should always review deductibles. You can do this with your property insurance agent. You want to be familiar with the amounts and so that you won’t be surprised if something happens to your home.
