Home insurance protects your house and belongings in the event of a fire, theft, or other covered disasters. It also provides liability coverage if someone is injured on your property. It’s important to understand home insurance so you can choose the coverage that is right for you.
Here are things to know about home insurance:
Home insurance isn’t optional if you have a mortgage.
When you purchase a house, lenders require you to have homeowner’s insurance. If you own your home outright, it isn’t required. However, having home insurance is a good way to keep you financially safe in the event of a costly repair.
Home insurance does not cover everything.
Damages from a flood or an earthquake are not covered by standard home insurance policies; you will need additional coverage to protect against those perils. Riders or endorsements, which can be added to your home insurance policy, provide limited protection against specific risks. It’s important to understand what additional coverage you might need to purchase so you can avoid ending up with expensive repair bills in the event of a disaster. Review your policy carefully or ask your agent about these options if you live in an area where floods or quakes are common.
Items within your home aren’t fully covered by your policy.
With a standard homeowner’s policy, there will be limits on how much your insurer covers for items in your home like furniture, clothing, and electronics. For expensive items, you can purchase additional coverage called scheduled personal property floaters. These floaters cover the full value of the item up to the limit stated in the policy.
The cost of coverage varies, so shop around.
Multiple factors go into calculating how much you pay for home insurance. The age and location of the home, whether the house has a security system or not, and what type of coverage is needed determine what you will pay. Shopping around and comparing rates from different insurers is the best way to make sure you get the right coverage and deal on your home insurance premium. Always use a trusted insurance agent or company and ensure you understand the coverage limits and terms before purchasing a policy.
Learn more about homeowner's insurance on our website.