Purchasing Coverage in Alabama

In the state of Alabama, there are no particular laws which require you to carry a minimal amount of homeowners insurance. Generally, the need for protection in Alabama is consumer driven or business driven. Consumers who own homes and decide (wisely) to look after their investment with a policy are completely at liberty to choose the type of plan they get as well as the level of coverage they wish to have. The insurers that drive the industry for policyholders, on the other hand, do so out of a sincere desire to look after their investment and their clients from suffering undue hardship from having to continue to pay for a dwelling in the event of a disaster that destroys it or forces the residents to move.

The vast majority of mortgage lenders, when offering a loan to purchase or refinance a home, will demand that as a condition of the loan being made, the consumer will agree to acquire and carry an active policy for insuring the dwelling at all times. Minimum levels of coverage will also usually be specified. This protection is provided in order to make sure that the house - which actually belongs to the lender in many legal regards until it is paid off - will be sheltered from the financial effects of a disaster.

Considerations to Make

A standard plan includes your basic protections against things such as fire, theft, vandalism, destruction by storm effects like hail, lightning and wind, liability protection if someone should injure themselves on your property or if your property (like a falling tree) should injure someone else. One thing not common to most policies that surprises many is protection against flood damage not caused by an appliance within the house. This needs to be a rider added onto your policy or taken out as its own separate policy if you seek that kind of protection such as from hurricane damage, which of course, can happen every year.

Replacement Coverage

The best that a plan can do, of course, if you ever have to file a claim for something lost damaged or destroyed, is to offer you money to help you replace it, but how much money will you get? That depends on your policy. There are three common levels of protection:

If you own your own dwelling outright, that is not really an excuse to go without a policy to protect yourself and your investment. One even moderate incident can cost you many thousands of dollars, eliminating the savings you may have earned by going uninsured.