All about homeowners insurance
Owning a home is a huge financial commitment, so you want to make sure to protect the investment you have made. The way you do that is to insure your home with a homeowners policy. Before you commit to a home insurance policy, it is important to make sure you understand how it works.
What is it?
Homeowners insurance is a type of property and casualty insurance that protects your home and other structures on your property, such as a garage. Most homeowners policies also provide you with personal liability insurance to cover things such as an injury on your property.
Who is it for?
A homeowners policy is for people who own and live in their homes. Such policies are not meant for people who own a home that they rent out to other people, nor are they for people who rent a home from someone else.
How does it work
A homeowners policy works much like other types of property insurance. If your home is damaged, you will have to file a claim, and your insurer will determine the covered damage and pay out up to the policy limit minus the deductible you owe. Home policies typically have different limits for different coverages, including structures, personal belongings and loss of use.
Home insurance policies are pretty standard. Most cover your home against things like fire and wind damage and exclude damage from other causes such as floods. They also offer you personal liability coverage. You can tailor some policies so that they offer more or less coverage for certain parts of your home, such as the roof. In coastal areas, some home policies may also have different coverage levels for hurricanes.
The main benefit of having a homeowners policy is ensuring your home, which could be worth several hundred thousand dollars, is protected against loss from factors that are out of your control. A secondary benefit of a homeowners policy is the personal liability protection it offers you, including covering some types of incidents that don’t even occur on your property.