Buying Homeowners Insurance? Suze Orman Says This Feature Is Key

You really don’t want to go without it.

If you own a home, you will need homeowners insurance. Not only is it usually a prerequisite for getting a mortgage loan, but it’s something you should have in case your home suffers damage, whether from a flood, fire, or weather-related event.

Homeowners insurance can also cover you if someone is injured on your property. Let’s say you didn’t clear the ice from your driveway and the delivery guy slipped and was injured. Your homeowner’s policy may cover their medical bills so you are not required to pay out of pocket.

But placing a homeowner’s insurance policy isn’t enough. You should also make sure to buy Right home owner insurance. And if you ask finance guru Suze Orman, there’s one key feature you should look out for.

Protect yourself against inflation

Consumers have seen firsthand how inflation can make almost anything more expensive. Over the last year and a turn, inflation has been surging at an unusual pace. But even during periods when inflation is more moderate, in general, spending naturally tends to increase over time. And it covers the cost of building and/or replacing your home.

That’s why Suze Orman emphasizes the importance of buying home owner insurance with extended replacement cost coverage. Doing so can help ensure that your home can be fully rebuilt if damaged or destroyed, although it will cost more.

It’s common for homeowners insurance to offer regular replacement expense coverage. But in that scenario, Orman warns, your payments are limited to 100% of the original value of your home and the items inside, such as your furniture and electronics.

Extended replacement cost coverage protects you from increased costs related to the home and its contents. With this kind of coverage, you may get a payout of up to 125% of the original value of your home and possessions. And that’s important because over time, the cost of replacing your home and belongings can go up. But with extended replacement cost coverage, you’re covered for that.

Read the details carefully

Owning a home is a huge expense. So it’s only natural that you’d want to save money on homeowner’s insurance to free up money for other expenses, such as property taxes, maintenance, and repairs.

But rather than opting for the cheapest homeowner’s insurance policy, it may be worth paying a little extra for extended replacement cost coverage. That way, if your home replacement costs increase over time, you’re still covered. Not every policy includes this feature, so pay close attention when you shop for home owner insurance.

And if you already have homeowners insurance, you may want to ask about upgrading your policy so it includes extended replacement expense coverage. Homeowners insurance should give you peace of mind. It’s worth paying a little extra for Really get the protection you need.