Homeowners insurance, also called hazard insurance or home insurance, is designed to protect the homeowner against certain named perils. Most homeowner insurance policies come with a deductible and exclusions.
A standard homeowners insurance policy covers losses occurring to one’s home as well as the contents of the home. Additionally, there is usually a loss of use component that provides coverage when the home is not habitable due to destruction from a named peril. Liability insurance for accidents that occur inside the home will also be included in a homeowners insurance policy.
Why Homeowners Insurance
What is homeowners insurance and who should buy this type of coverage?
Homeowners insurance is a necessity for most people since their home is their single largest asset. The typical homeowners policy has two main sections: Section I covers the building and personal property of the insured and Section II provides personal liability coverage to the insured. Almost anyone who owns, rents or leases property has a need for this type of insurance. Most Lenders require homeowners insurance as part of their requirements to obtain a mortgage.
What is covered by homeowners insurance?
Dwelling – Dwelling coverage is the component of the homeowners policy that covers the repairing or rebuilding of your home in the event that it’s damaged or destroyed by a covered peril, such as fire, lightening, wind, or hail.
Other Structures – Other structures coverages is the component of the policy that covers the repairing or rebuilding of additional structures on your property besides your home in the event it is damaged or destroyed by a covered peril. Examples of other structures include a shed or detached garage.
Personal Property – Personal contents or personal property coverage refers to the portion of the policy that covers the costs of replacing your covered belongings within your home in the even they are damaged or destroyed in a covered peril.
Loss of Use – The portion of your standard home insurance policy that provides coverage for other living arrangements while your primary residence is being repaired or rebuilt is call loss of use coverage. This coverage reimburses you for living expenses, such as hotel costs and food while your home is uninhabitable.
Personal Liability Protection – To protect you and your covered family members from lawsuits brought against you by a third party. Examples of situations where personal liability protection comes to the rescue include being sued when your dog bites a friend or a delivery worker falls on your steps due to a faulty hand railing.
Medical Payments – In the event that someone is injured in your home or on your property but doesn’t sue, the medical payments portion of your home insurance policy will cover injuries sustained.
Additional Property Coverages – Additional property coverages include debris removal, property removal, fire department fees, credit card theft charges, identity theft charges, building collapse, and damage to trees and shrubs.
Endorsement – For additional protection, endorsements can be added to a standard homeowners insurance policy. Examples of endorsement add-ons include guaranteed replacement cost coverage, extended replacement cost coverage, broadened theft protection coverage, secondary residence coverage, inflation guard coverage, expanded credit card theft and forgery coverage.
What is NOT covered by homeowners insurance?
Typically, claims made from floods, earthquakes, war, and termites are excluded from a standard homeowners insurance policy, but special insurance riders can be added to ensure the homeowner is covered for these events.
What factors should I consider when purchasing homeowners insurance?
Here are a few things you should consider when you purchase homeowners insurance.
- One of the most important things to consider is how much it would cost to replace your home. Most companies require that you insure your home for 100% of its replacement cost. The replacement cost is different than the purchase price or the tax assessed value. In the event of a loss, some companies may apply a co-insurance penalty if you underinsure your home.
- Determine the amount of property insurance coverage that you need to cover your personal belongings. Many companies automatically extend a certain percentage of the dwelling amount to personal property. This may or may not be increased/decreased depending on the company.
Compare Home Insurance Quotes
One of the best ways to save money on your homeowners insurance is to compar quotes from different carriers to
know that you are getting the best coverage at the best price.
HOW TO SHOP FOR HOMEOWNERS INSURANCE EFFECTIVELY
Most homeowners understand that they need to maintain a homeowners insurance policy. This policy is what’s going to protect your biggest asset. But, knowing how to shop for homeowners insurance can be confusing. You need to know the factors that influence your rates, what coverage you need, and how to find the best deal.
5 TIPS TO GET THE BEST HOMEOWNERS INSURANCE
Your homeowners insurance is one of the most important purchases you’ll make outside of the actual purchase of your home. This is what stands between your family and potential financial disasters if someone becomes injured while on your property or if your home is damaged or destroyed by covered events. These are a few things you can do to compare home insurance more effectively.
HOW MUCH HOMEOWNERS INSURANCE DO I NEED TO INSURANCE MY HOME ADEQUATELY?
Homeowners insurance is there to protect your home, the contents in it, and, indirectly, other assets you own in
the event of theft, accidents, fires and other disasters. However, when it comes time to shop for a home insurance
policy, there’s no one-size-fits-all approach.
Quickly compare quotes for homeowners insurance with Bolt here.
Save On Homeowners Insurance
HOW TO CHOOSE HOMEOWNERS INSURANCE TO SAVE MONEY
Your homeowners insurance is one of the most important purchases you’ll make outside of the actual purchase of
your home. This is what stands between your family and potential financial disasters if someone becomes injured
while on your property or if your home is damaged or destroyed by covered events. These are a few things you
can do to compare home insurance more effectively.
How much does homeowners insurance cost?
Homeowners insurance varies based on many factors – where is your house located, how old is the property, what security is installed, what updates have been completed, what building materials were used, how large is the home, have any claims been made, and many more. With that being said, the average cost of homeowners insurance in the United States is just over $1,000 anually.
What are some practical things I can do to lower the cost of my homeowners insurance?
When shopping for homeowners insurance, be careful to make sure each insurer is offering comparable coverage. Many insurers use the “Insurance Services Office” (ISO) policy forms as a starting point and add many additional and/or optional coverages. Your insurance professional will be happy to review and explain the differences between companies and coverages.
Another way to lower the cost of your homeowners insurance is to raise your deductible. Increasing your deductible from $250 or $500 to $1,000 or higher will lower your premium. You need to determine how much of any loss you can comfortably retain based on the financial resources you have available.
Another way to lower the cost of your homeowners insurance is to look for any discounts that you may qualify for. Many insurers will offer a discount when you place both your automobile and homeowners insurance with them. Insurers may also offer discounts if your home has a security system. Be sure to ask your insurance professional about any discounts that you may qualify for.