All about homeowners insurance
A home is the biggest financial investment most people will ever make, so it makes sense to protect that investment by insuring it. If you own your own home, you definitely should have a homeowners insurance policy.
What is it?
Homeowners coverage is a type of property insurance that insures not only your home itself but also your personal possessions. In addition, your homeowners policy also offers personal liability insurance to protect you from incidents such as someone getting injured on your property.
Who is it for?
Anyone who owns a home and lives in it needs a homeowners policy. If you have a mortgage, your lender will require a homeowners policy, but even if your home is paid off, you still should carry homeowners coverage.
How does it work?
Homeowners insurance is pretty straightforward. If you have what you think is a covered claim, such as fire or hail damage, you need to contact your insurer, which will send out an adjuster to assess the damage. Once your claim has been certified, your insurer will pay up to the policy limit minus the deductible. If your home is unlivable because of damage, your insurer also will pay for you to live somewhere else. If the claim is a personal liability one, your insurer will work to settle with the other party or pay to defend you in court if necessary.
Types of policies
Homeowners policies are fairly standard. Most cover common incidents such as hail, wind and fire damage while most exclude damage from earthquakes and floods. One big difference in coverage is whether your policy pays actual value, meaning what your stuff is worth, or replacement value, meaning the cost to replace it in today’s dollars, which usually is more. Most policies also let you add riders or endorsements, which allow you to pay extra premiums to cover things the policy doesn’t normally cover.
The main benefit of having home insurance is ensuring your house, which is likely worth hundreds of thousands of dollars, is protected against loss. Personal liability protection is another benefit of the policy.