Homeowners Insurance protects homeowners against the many risks associated with owning property. A homeowners insurance policy provides financial coverage for losses or damages caused by theft, accidents, and some natural disasters such as fires. Virtually all mortgage companies require borrowers to have insurance coverage for the full value of a property and won’t make a loan or finance a residential real estate transaction without proof of it.
Areas of protection include:
Additional Living Expenses
Theft, weather damage, and fires are a few of the most common reasons as to why people make claims.
Why you need a Homeowners Insurance Policy
Theft: During 2013, law enforcement made an estimated 1,559,284 arrests for property crimes according to the latest FBI statistics.
Weather Damage: In 2014, winter storms alone caused an estimated $2.3 billion in insured losses according to the National Weather Service.
Fire: A home structure fire was reported every 85 seconds in the U.S. in 2014 according to the NFPA (National Fire Protection Association).
“Alliances Insurance and Kevin Hamill are top notch! I am a Mortgage Advisor and in my business, I depend on professionals like Kevin Hamill to take great care of the clients I refer to him. I cannot speak highly enough of Kevin and his team. If you are considering switching insurance providers, it is worth reviewing your policies with Alliances Insurance before you renew!”
There are three basic levels of coverage in homeowners insurance: actual cash value, replacement cost, and guaranteed (or extended) replacement cost/value.
Homeowners insurance generally covers:
Destruction and damage to the interior and/or exterior of the structure (Ask about replacement costs versus actual cash value.)
Loss or theft of belongings
Fire & water damage
Personal liability for harm to others
Additional living expenses (Loss of Use)
Not generally covered in standard homeowners insurance:
Valuable jewelry (additional insurance may be purchased for documented, pricier items)
Other collectibles (additional insurance may be purchased for documented, pricier items)
Identity theft protection
Broadly speaking, insurance covers you for potential loss resulting from risks such as burglary or theft, severe storms, fire and also your personal liability. Your home liability coverage protects you in the event that someone is injured on your premises or you are responsible for damage to someone else’s property. For example, if you failed to remove a tree known to be diseased, and it fell on your neighbor’s car, you may be held liable for the damage due to negligence. Note that liability insurance will not cover acts of violence or intentional damage.
Your liability insurance policy would also typically provide coverage if:
If a liability claim is filed against you, it may result in your insurance paying for property repairs, medical or funeral costs, or even a lawsuit if the injured party chooses to launch a legal process. When evaluating the amount of liability coverage that makes the most sense for you, be sure to fully discuss your limits and deductibles with your agent. Take time to understand your risks, and determine whether you will be well covered in various circumstances. In the event of a disaster, the costs of recovering can devastate household finances. Quality home insurance can make a difficult situation bearable and help you get your life back on track.
Homeowners Insurance should cover:
The value of your home and the amount of coverage you buy will largely dictate the amount you will pay for your premiums. But there are other factors that can affect your premium as well, including things like the crime rate in your area and past claims you may have made.
It’s always important to comparison-shop for the best Homeowners Insurance rates and the best value. An independent agent can compare prices from several different insurance companies to find the right policy for you.
Liability can be defined as “a legal or financial obligation.” As a property owner, you are legally responsible to make sure the premises of your home and property are safe, and you can be held accountable if anything happens on your property, whether due to oversight or negligence. Keep the following in mind regarding liability and negligence:
For items with a high-dollar value, your insurance agent can issue you scheduled personal property coverage. Jewelry, collectibles, and fine art, for example, can be properly protected when scheduled into your Homeowners policy.
While Homeowners Insurance provides a lot of important coverage, it can’t cover everything. Disasters like hurricanes, floods, and earthquakes typically aren’t covered by your insurance and require additional coverage to help protect you. Be sure to check your Homeowners policy for inclusions/exclusions.