One of the things you must have when buying a home with a mortgage is home insurance. Since the bank technically owns the property until the mortgage is paid off, insurance protects the home in the event that something were to happen to it. You may assume that home insurance works just like car insurance, but home insurance can have riders that add onto a base policy to cover different scenarios. Here is what you need to know about why you would need a home insurance rider for your policy.
You Have Expensive Personal Property
One reason that homeowners get a ride for their policy is due to the personal property that they have. It is the best way to ensure that you have coverage for everything in your home, since there are limits that may be in place with a basic policy. Chances are that you will want protection for everything in your home, which can help cover items during a fire, theft, or another covered disaster.
Some home insurance policies only give a specific amount of personal property coverage. In addition, there will be limits on certain categories of personal property. For instance, you may have a limit of $25,000 in personal property, but a limit of $2,000 for jewelry. When you have a wedding ring in the home that's worth car more than that $2,000 limit, a rider will be necessary to cover that specific item.
You can work with an insurance agent to determine if you have all of the personal property coverage you need, or if you need to look into extending coverage with a rider. Other odd items that may need additional insurance are artwork, furs, and firearms.
You Run a Small Business From Home
If you work out of your own home, be aware that the items related to your home business may not be covered. This includes equipment, inventory, and any item that has been bought specifically for the home office.
You'll need to have a rider that is designed to specifically cover these work related items. Without the coverage in place, a theft or fire could ruin your business due to everything being destroyed. The rider will give you some peace of mind that you'll have protection for when you need it.
For more tips on how to use a rider to extend your home insurance coverage, reach out to a local insurance agent.