Protecting Your Charleston Home: A Guide to Homeowners Insurance

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Purchasing a home in Charleston is a significant investment, and understanding the ins and outs of homeowners insurance is crucial for protecting that investment. Homeowners insurance provides financial security against unexpected losses, covering everything from repairs to your home structure and detached garages to replacing belongings within your house. It can even cover legal fees, medical costs, and living expenses if a covered incident makes your home temporarily unlivable. Given the unique challenges of coastal living, such as potential storm damage, having the right coverage is paramount. Consulting a REALTOR® early can connect you to a licensed insurance agent and help you make the right decisions.

When selecting a policy, it's important to understand what "perils" are covered. While coverage can vary, most policies protect against everyday events like fire, hail, lightning, freezing, theft, and vandalism. It's crucial to note that most policies exclude flood and earthquake damage, which are major concerns in a place like Charleston. Therefore, it's important to consider flood insurance separately if needed. Your mortgage lender will also require homeowners insurance when you take out a mortgage, and it's good practice to maintain coverage for the complete protection of your assets, even if you pay off your mortgage. The insurance cost will depend on factors like the house's age, square footage, location, and condition. It's important to consider your needs and shop around. You may have the option to pay your premiums monthly, quarterly, or annually, and your lender can collect the cost as part of your mortgage payments.

When it comes to how insurers reimburse you after a loss, there are two primary types: replacement cost value and actual cash value. Replacement cost value means the insurer pays to buy a brand-new, like item and can cover your home up to the policy limit if you are insured for at least 80% of your replacement cost. This is different than market value. Actual cash value accounts for wear and tear over time (depreciation) and only pay the current value. While actual cash value is often used for personal property claims, replacement cost options are also usually available. Some policies offer "extended replacement cost" options, increasing coverage above your policy limits.

While homeowners insurance premiums on your primary home are generally not tax-deductible, there may be exceptions for those who operate businesses out of their homes, rent their property out, or suffer loss from a federally declared disaster. Be sure to consult a tax professional for your unique tax situations. Insurance laws vary from state to state, so contact a real estate professional or attorney to discuss state and local laws. For further resources, visit www.facts.realtor to ensure your home and family are adequately protected in Charleston.

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