What is Homeowner’s Insurance

Homeowner’s insurance or commonly called hazard insurance or home insurance is the type of property insurance that covers private homes. This insurance policy combines various personal insurance protections, including:

  • losses occurring to one’s home.
  • losses of the contents in one’s home.
  • loss of its use (additional living expenses).
  • loss of other personal possessions of the homeowner.
  • liability insurance for accidents that may happen at the home, or at the hands of the homeowner within the policy territory.

The homeowner’s insurance requires that at least one of the above named insureds occupies the home. The typical homeowners policy has two main sections:

  • Section I covers the property of the insured and,
  • Section II provides personal liability coverage to the insured.

Why to Buy Homeowner’s Insurance

A homeowner’s insurance policy is designed to protect home owners against certain perils. Anyone who owns or leases property has a need for this type of insurance. And many times, homeowners insurance is required by the lender as part of the requirements in obtaining a mortgage. And most important, when it comes to protecting your most valuable assets, do you really need to think twice? Of course not.

How to Save on Homeowner’s Insurance

It is always a good idea to get a quote and compare multiple quotes before purchasing insurance for your home. In essence, you want the most protection for the least number of dollars. As the price is always an issue we suggest one very simple way. Check out the form at the top of the page. You can purchase homeowner’s insurance by using it and save money as well. So don’t hesitate, get your quote to get the best price.

When is Homeowner’s Insurance Required

If you have a mortgage, your lender will require coverage, and if your home is mortgage-free than you should have coverage anyway. But not all insurance coverage is alike. Policies and protections differ, and so do costs. In the US most home buyers borrow money in the form of a mortgage loan, and the mortgage lender always requires that the buyer purchase homeowner’s insurance as a condition of the loan, in order to protect the bank if the home were to be destroyed. Anyone with an insurable interest in the property should be listed on the policy. In some cases the mortgagee will waive the need for the mortgagor to carry homeowner’s insurance if the value of the land exceeds the amount of the mortgage balance. In a case like this even the total destruction of any buildings would not affect the ability of the lender to be able to foreclose and recover the full amount of the loan. The US insurance companies used to offer foundation insurance, which was reduced to coverage for damage due to leaks, and finally eliminated altogether.

What to Look for in a Home Insurance Policy

There are a number of factors you should consider when purchasing homeowner’s insurance. Here are the things you should consider when buying homeowners insurance:

  • Exclusions – They are put in place within your home insurance coverage to limit the situations that you can claim on. For example, you would be able to claim for a stolen stereo system but not a damaged CD. Some policies have more exclusions than others so make sure you fully read the terms and conditions so that you are fully aware of what you can and can’t claim for.
  • Valuables cover – Some home owners insurance policies cover building and contents but stop short of insuring valuables such as jewelery. Others insure everything that is actually within the home. You should ask whether valuables are covered in your basic policy or not and, if not, whether you can actually add that element to your policy.
  • Excess/deductible – Most policies will stipulate that you will have to cover the first x amount of dollars on each claim. This is called a deductible or excess. You are usually liable for the first $50 to $250. This is a big step, especially if you are looking to recoup your losses so shop around for the best value excesses.
  • Off premises cover – Home insurance coverage may or may not extend to personal property being taken out of your home. Technically it is more susceptible to damage if removed from your home, which is why some companies do not provide cover. However, some companies will as part of your policy or as an add on, so watch out for this.
  • Repair and replace – Company policies vary as far as home insurance coverage for damaged items are concerned. If you want to simply replace items yourself then read the policies very closely before signing anything.
  • Claim limits and procedure – Every home owners insurance policy varies in that the monetary amount you can claim, it can be as low or as high as they stipulate. It may be better to request the amount of cover that you would like and then choose a policy that complies with that. Also, claims procedures can range from extremely simple to very long and drawn out. Remember, if something sounds complicated, then it usually is!

As the price is always an issue we suggest one very simple way. Check out the form at the top of the page. You can purchase homeowner’s insurance by using it and save money as well. So don’t hesitate, get your quote to get the best price.

Additional Information

  • See our Auto Insurance section where you can find detailed information on the different types of auto insurance, the minimum required coverage for each state and more.
  • See our Motorcycle Insurance articles and find out how each state defines motorcycles, which are the minimum requirements, how to establish financial responsibility, how to save money on this types of insurance, etc.
  • See also our Health Insurance and Life Insurance sections for more specific details regarding these types of coverage.
Last updated on Saturday, May 12 2018.

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