Homeowners Insurance Coverage

Homeowners insurance coverage can provide you with peace of mind if your home is ever the victim of theft, vandalism or disasters. A home insurance policy also provides liability protection if someone is accidentally injured on your property and incurs medical bills or if you need to be defended against a lawsuit judgment.

Before a mortgage loan can be funded, lenders require borrows to secure home insurance coverage. This is different than private mortgage insurance, which is usually required when the loan is more than 80 percent of the house's value. Home insurance premiums are typically rolled into monthly mortgage payments and are deposited into an escrow account that the lender dips into annually to pay the insurer. If the mortgage is paid off, you are not required to carry coverage, but leaving your property unprotected is an enormous risk.

Before signing any contracts, it is crucial you understand how a home insurance policy works, as well as know what the plan covers and excludes since policies can vary widely. Exclusions typically include natural disasters, such as floods, mudslides, earthquakes and sewer backups, as well as damage that is the result of neglect, including dry rot, mold and vermin infestation. Animals, motor vehicles and watercrafts are also excluded unless additional coverage, known as an endorsement, is obtained.

The primary purpose of homeowners insurance coverage is to protect you financially if your house needs a major structural repair due to accidental damage, such as a tree falling through the roof, electrical wiring catching fire or plumbing pipes bursting. Detached structures, such as storage sheds, fences, driveways and patios are usually excluded.

Protection from damage and theft is also extended to the property inside your home, including firearms, valuable art, expensive electronics and jewelry. Depending on the policy, you may be reimbursed either for the original or current market value. But, be aware there is usually a cap on the amount you will receive for all property combined. You may want to add endorsements to exceptionally valuable personal property, such as stamp collections, jewelry, furs, guns, antiques, bank notes and deeds.

Like most types of insurance policies, homeowners insurance requires a deductible to be fulfilled before a claim will be paid. This can range anywhere from $250 to $5,000. Most experts advise choosing the highest deductible available as this will lower the yearly payment and will deter you from filing claims for minor mishaps. Each time a claim is filed, you run the risk of paying higher premiums or even being denied coverage for your next home.

Our website also provides valuable homeowners insurance information so you can make an informed decision, including independent insurer reviews, industry news and state regulations, as well as home improvement and safety tips and detailed answers to dozens of common house insurance questions.