Home Owners Insurance, The Facts.

What is Home Owners Insurance?

What is Home Owners Insurance?

When you purchase a home, most prospective owners will borrow money from a mortgage lender. The mortgage lender always requires that the buyer purchase home owners insurance as a condition of the loan. This way not only are the new homeowners covered financially if the house is destroyed, but the bank itself is also covered.

In the same way as auto insurance covers your car, Home Owners Insurance is an insurance policy that protects you and your home. If your home or house is damaged, homeowners insurance helps cover financial expenses. There are many things that can damage your house which is covered by a standard home owners insurance policy. Fire, wind, hail, theft, and lightning are just some of the things covered. So for example, if your home was destroyed in a fire, homeowners insurance would help pay to rebuild you home. The same would happen if your house happened to be destroyed or damaged by lightning, or if your home was burglarized while you were away. Homeowners insurance helps to protect the investment you have in your home or house. Separate insurance policies, however, are needed for damage caused by floods or earthquakes, since these are not typically covered in the standard home owners insurance. These separate policies can be added to the standard home owners insurance easily.

Home owners insurance doesn't cover just damages though. There is also coverage for lawsuits, separate structures, personal property, and Medical payments. Say you accidentally cause damage to a neighbor's home or property. If they file a lawsuit against you for the damage, your homeowners insurance would help cover the legal fees. Another thing that is covered by homeowners insurance are other structures on your property. A portion of your home owners insurance will cover the cost to rebuild such structures as sheds and detached garages. A typical home insurance policy offers 10% of the amount of coverage you have for your house itself as coverage for the other structures. For example, if you have $200,000 worth of insurance coverage on your house, the insurance policy would include $20,000 for separate structures on your property. Personal property is also covered by home owners insurance, such as clothing and furniture. Insurance policies usually offer between 50-70% of the amount on your home as coverage for your house contents and personal belongings. This way if a burglar breaks into your home and steals your jewelry or television, the insurance policy helps cover the cost of replacing them. Just as auto insurance covers you in an accident, most homeowners insurance policies cover a portion of your medical expenses as well. This part of the insurance is for when a person is injured on your property. If a neighbor were to fall and injure themselves on the steps of your home, the owners insurance would typically cover $1,000 per person injured.

In conclusion, getting yourself a comprehensive home owners insurance policy can go a long way towards creating home security and helping the owners feel comfortable and at ease. Homeowners should not have to worry because their home or house will be covered from damage and/or loss.

by: Janetta Lapinta

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