Everything You need to Know about Homeowners Insurance

Homeowner’s insurance is often purchased begrudgingly because it is required by your mortgage lender but if you ever need this insurance it more than pays for itself. Mortgage lenders often require homeowner’s insurance because they are interested in protecting their investment but homeowner’s should also recognize the value of this insurance. Homeowner’s assurance covers your home and your property but not the land on which your home resides. You will be covered in the event of natural disasters such as fire, lighting and flooding as well as other occurrences such as burglary and vandalism. Homeowner’s insurance may not cover all of your possessions and certain items of high value may require addition property coverage. If you ever find yourself in a position where you need your homeowner’s insurance, you will fully recognize the value of purchasing adequate coverage.

Those who purchase homeowner’s insurance often wonder how much insurance they should purchase. The key to purchasing the right amount of homeowner’s insurance is understanding just what is covered under your policy. It may seem logical that you should purchase homeowner’s insurance equal to the amount of your mortgage but this is actually not the wisest way to purchase your homeowner’s insurance. Using this amount may result in you paying either too much for your policy or not enough to cover your home and possessions. This is because while your mortgage covers the physical structure of your home as well as the land on which your home stands, homeowner’s insurance will only cover the physical structure of your home as well as your personal property. For this reason you should purchase homeowner’s insurance to cover the value of your home as well as your personal property instead of relying on the value of your mortgage as an indication of how much insurance you should purchase.

Another common question regarding homeowner’s insurance is whether or not your insurance will cover all of your possessions. The answer to this question is usually no. Most homeowner’s insurance policies will provide some coverage of your personal property including appliance, clothing, furniture and some jewelry up to a maximum limit. Therefore, if you have expensive jewelry or works of art, you might be required to purchase additional property owner’s insurance to cover these items. It is also important to remember that if you make purchases for expensive items, it is recommended that you increase the value of your homeowner’s insurance to compensate for these items.

Flood insurance is not typically covered in homeowner’s insurance policy. For this reason, if you live in a designated flood zone it is advisable that you purchase flood insurance in addition to your homeowner’s insurance. The majority of flood insurance is provided by the federal government but each individual homeowner is responsible for applying for and maintaining this coverage. Obviously those who live in a flood zone would be wise to purchase flood insurance but it is something for all homeowners to consider.





Finally, a useful tip for those who purchase homeowner’s insurance is that their personal property is covered even if they are not in the house when they are lost, stolen or damaged. For example, if your car is stolen or broken into, your car insurance would cover your vehicle but any items inside the car would be covered by your homeowner’s insurance. Many people make the mistake of contacting their car insurance provider when items are stolen from their vehicle instead of contacting their homeowner’s insurance provider.

The deductible on homeowner’s insurance is usually quite high compared to other types of insurance but this amount is relatively small in relation to the value of your home and personal possessions. The confidence of knowing that you will be able to replace your home and possessions in the event of a catastrophic event is well worth the price of home owner’s insurance. Even if you are not required to purchase homeowner’s insurance, you should still consider carrying a policy to protect your investment in your home and possessions.

Ray Shelton is editor at http://www.ww-home-insurance.com

Everything You need to Know about Homeowners Insurance by ANTHONY SHELTON

Tag: homeowners insurance, home insurance, mortgage insurance