Homeowners Insurance

What Is Homeowners Insurance?

Homeowners insurance is a form of property insurance that covers losses and damages to a home and the furnishings and personal property located within it. Homeowner’s insurance can also provide liability coverage against accidents in the home or on the property.

A standard homeowners insurance policy typically covers:

  • Dwelling – helps pay for damage to your home and any attached structures, including a deck or garage. The amount of dwelling coverage is usually calculated by the square footage of your house and what it would cost to rebuild your home. This is not necessarily the home’s market value.
  • Other structures coverage – helps pay for repairs or replacement for detached structures on the property including fences and sheds. 
  • Personal property – helps pay to replace certain belongings, such as furniture and electronics that have been stolen or damaged.
  • Personal liability – if you or a family member are found legally responsible for accidentally damaging someone else’s property or injuring someone, liability coverage may help pay for related repair costs and legal fees in addition to helping with medical bills.
  • Guest medical protection – if a guest is accidentally injured at your home, your policy’s guest medical protection helps pay for their resulting medical bills.
  • Additional living expenses coverage – If you cannot stay in your home due to damage caused by a covered loss, your coverage may help pay for temporary living costs such as hotel bills.

Why does Homeowners Insurance matter?

Homeowners insurance protects homeowners against the cost of repairing potentially expensive issues and/or liability that can arise when owning a home. Like any other form of insurance, it’s there for financial help, just in case. 

Also, homeowners insurance is particularly important if you are purchasing a home with financing from a lender. Most lenders will require proof of homeowners insurance prior to funding the loan as a measure to protect their investment.

How do I know if a Homeowners Insurance policy is right for me?

If you are looking to purchase a home or simply need to add, update or change your current coverage, keep in mind that not all policies are the same. The type of coverage will vary depending on the company and policy type. Make sure to take your time and compare not only a policy’s cost but also its coverage in order to find the option. The type of coverage you need, will in part, be dictated by potential issues that could arise in your area.

Note: one thing to keep in mind is that homeowners insurance rarely covers flooding. If you live in a flood-prone area, you may need to purchase additional coverage that is not part of a standard policy.