What is Homeowners Insurance?

Homeowners insurance is insurance that covers your home and its contents from various liabilities. Homeowner’s insurance covers a broad range of losses or indemnity to people’s houses and home possessions, as well as several types of situations for which homeowners might be liable. It protects homeowners from such causes as theft, storms, and fires. In addition, homeowner’s insurance characteristically pays for additional expenses related to home damage, such as fees for temporary lodging at the same time the damages are fixed. It protects against frivolous lawsuits that could crop up from ownership of the property. Additionally, it usually includes a type of coverage called medical payments. Such coverage would pay, for instance, for damages from a slip and fall injury to a guest while on your property. Homeowners insurance more often than not does not cover the risks associated with operating a home-based business, such as if a customer is injured on the premises.

A common misunderstanding is that this type of insurance only protects against damage to the home itself. The reality is that this type of insurance covers a wide range of things, depending on the type of homeowners insurance plan you have. A basic Homeowners insurance policy covers natural disasters (such as fires, etc.) and burglary. However, it can also cover the vandalization of your home, lawsuits from people injured in your home, defamation of property by an animal, etc. It’s good idea to read your policy to further identify which aspects are covered.

There are many different types of homeowner’s insurance policies available; in fact there are thousands. It all depends on the different options you go with, your deductibles, your coverage amounts, etc. in addition to all the various type of riders or supplements that you add on. Interestingly enough, before the 1950s, you could not buy homeowners insurance as a package. You had to buy each part separately. For example, you’d have to buy theft insurance to protect your home against burglary; you’d have to purchase fire insurance policy to protect your home against fire and so forth. However, to make things more convenient, insurance companies started offering packages of these different policies. This has made it much easier for consumers.

Of course, the more additions that you add on to your homeowner’s insurance policy, the more expensive it will cost. In addition, the higher the deductible, the lower the cost of the homeowners insurance policy.

Keep in mind that packages from one insurance company to another will vary in their coverage limits, so just because one insurance company offers a certain package at a certain price doesn’t mean that another insurance company will do the same.

You must decide which policy is right for you. Some things to keep in mind when looking for a homeowners insurance policy are as follows: because this type of insurance coverage is meant to cover the replacement (or market value, depending on policy) of your home and your belongings, you need to determine the value of everything that is to be covered. You should have someone appraise your home, so that you can determine the replacement cost of everything.

Remember that you are going by the replacement cost, not the cost of the items at the time of purchase.

In order to decide on the type and amount of coverage you need, you should make an inventory list of what you feel needs to be protected in your home. Do you have a lot of valuables that you think should be protected? Are you in a flood zone? (Note that homeowners insurance does not cover earthquakes or floods; you will need to purchase those as a separate policies.) Do you have coyotes, birds or other wildlife coming through your neighborhood? These are all important questions to answer. Before you take out a homeowner’s insurance policy, you should talk with your homeowner’s insurance agent to decide which policy would be the best for you and your family.

Homeowners insurance policies need to be compared against one another. Be sure to shop around for a homeowners insurance. I recommend that you speak with a reputable insurance broker, one who can shop and compare policies from many companies. Check with your Realtor® for a recommendation of a top notch broker.  Another good thing to do is to ask fellow homeowners who they have gone through, and if they like their company and its homeowners insurance quotes policy.

Remember, it is critical to document everything you own. Often after an accident happens, no one can recall all of the personal belongings they own or how much they paid for them. Be sure to keep all of your receipts, statements, and cancelled checks, and the dates of when you bought personal items.

Write everything down in a listed inventory , or take photos / video of them. After you do this, be sure to keep the documentation in a safety deposit box, totally separate from your home.

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