A home is more than just a place to live. Perhaps, it might be one of your most precious assets that can be too costly to refinance out-of-pocket if a tragedy strikes. Investing in homeowners insurance coverage is a decent idea since you’ll be relieved of the financial burden when a disaster strikes suddenly. Not only is it a good idea it’s typically required by your mortgage lender.
Simply put, homeowners insurance is a type of property insurance that offers financial protection against damages to your home, property, and even personal belongings in the event of theft, fire, and other disasters. If you want something to protect your larger appliances from mechanical breakdown consider also looking into a home warranty.
Home insurance can also assist when you’re held accountable for an accident or injury that someone may experience while on you property. This type of insurance is intended to cover the following primary functions:
- Repair your home and any other damaged structures from disasters such as fires from poor maintenance, faulty wiring, or natural
- Repair or replace your belongings in the event of theft
- Cover personal liability if you’re found liable for damage or injury to a third-party.
Homeowners insurance coverage isn’t a legal requirement; however as noted above, mortgage lenders demand homeowners to insure their homes before processing the mortgage. It would be a huge risk for mortgage lenders to process loans for homeowners who aren’t looking to protect their homes by taking insurance coverage. This is because homeowners would encounter difficulties repaying the mortgage as per the agreed terms when a disaster strikes and wreaks havoc on the house.
Home insurance coverage is a good investment, even if you don’t have a mortgage, since it provides both property and liability coverage as well as providing you peace of mind. Generally home’s appreciate more per year than you will spend on the insurance so it’s basically a free way to protect one of your biggest investments that you will be owning for years.
What does homeowners insurance cover
Homeowners insurance normally provides cover for the following
- Your dwelling
- Personal belongings
- Certain structures on your residence
- Liability for damage or injuries to a third-party property
Besides, homeowners’ insurance allows for the purchase of extra coverages for immense protection. Ordinary homeowners insurance policies provide coverage for damages resulting from risks such as windstorms, fires, lightning strikes, etc. However, it is essential to note that homeowners’ insurance excludes some natural disasters from its coverage. For instance, damages resulting from natural calamities such as floods and earthquakes aren’t covered by homeowners insurance.
However, homeowners looking to safeguard their homes and personal property against those kinds of risks can shop for separate insurance policies.
- Dwelling Protection
A standard homeowners’ insurance coverage offers dwelling protection that entails the structure of your residence, house foundation, walls, and roof. Additionally, dwelling protection may help protect other parts of the home, like the deck, garage, against specific risks.
- Liability Protection
An ordinary homeowner’s insurance policy offers liability coverage if a visitor sustains injuries while on your property. If you’re found liable for the injuries sustained, the liability coverage may cater for medical expenses incurred. This ensures you aren’t financially distressed whenever such a sudden incident occurs.
- Personal Property Protection
Besides providing cover for home damage, homeowners’ insurance provides coverage for personal items attached to the house. For instance, if thugs break into your residence and disappear with electronics or your furniture is damaged by fire, personal protection coverage will step in and refinance repair or replacement of such items.
Most homeowners’ insurance companies offer non-compulsory policies that can aid in protecting your personal belongings. For example, insurers allow homeowners to purchase additional coverage for items whose value exceeds your property coverage limits.
- Other Structures Protection
A vast number of homeowners’ insurance policies cover other structures that are part of your property but detached from your home like a garage, fence, etc.
- Coverage Limits and Deductibles
Note that every coverage in a homeowners’ insurance has a limit, that is, the greatest payout your policy would pay in the event of a loss. Insurers allow homeowners to alter coverage limits to suit their needs.
In most instances, you must first pay your deductibles before the insurance can step in to cover a loss. If you’re unable to review your coverage limits and deductibles, reread your policy or contact an insurance agent.
Why homeowners insurance is needed
- Protect You from Natural Calamities
Natural calamities occur suddenly, and regrettably, you’= have no control over it if it wrecks havoc on your home. With home insurance, you can have peace of mind even when a natural disaster strikes unexpectedly. Homeowners insurance will refinance repairs and exempt you from financial distress.
- Safeguard You from Theft
It can be distressing to learn that thugs broke into your home and escaped with valuable items. However, if you have a homeowner’s insurance policy, you won’t worry so much because it will help you financially replace the lost items. Home insurance covers losses pertaining to damages to your residence as well as the loss of belongings.
- Protects You Against Lawsuit
Actually, we can’t rule out the prospects of someone getting injured on your property. In such instances, a lawsuit can be filed against you. If such a thing happens, you will be in trouble, especially if you’re not financially prepared. Having homeowners’ insurance protects you from sudden legal actions that can leave you financially troubled especially when tough compensation legal penalties are issued. Homeowners’ insurance policies will offset medical bills and even exempt you from paying lawyers fee. This will, in the end, save you time, money, and unnecessary stress.
- Loss of Use Insurance
Suppose you’re compelled to search for an alternative refuge when your home is being repaired or rebuilt due to an insured event. Your home policy will cover all the expenses you will incur because you can’t use your property. This is another advantage of having homeowners’ insurance.
Steps to get homeowners insurance
- Be insightful regarding your homeowners’ insurance demands.
- Evaluate how you intend to purchase homeowners’ insurance
- Gather all the necessary information you require before shopping
- Call different insurance companies and get quotes based on your home and deductible needs
- Contrast the quotes and pick a policy
- Review your policy details and submit a copy to your mortgage lender
Home insurance providers and their advantages
Amica Mutual
Amica Mutual is one of the most highly ranked home insurance companies in the globe. Its high ranking is attributed to its decent policy offers as well as rates. Amica is also renowned for its excellent customer services, which are rare to find in the insurance industry. Here are its pros
- Affordable policy rates
- Excellent customer service
- Faster processing and handling of claims
Allstate
Apart from offering the most affordable home insurance rates, Allstate helps new home buyers to understand the policies they’re about to buy.
Pros
- Pays attention to new buyers
- Online education tools
- Products and services that can be easily understood
Geico
Geico offers the most affordable insurance policies amongst competitors. This ensures most homeowners can easily afford their preferred policies. However, Geico falls below the pecker order to limited coverage options and poor customer support.
- Affordable rates
- Easily accessible
- Flexible policy options
Liberty Mutual
Headquartered in Boston and they usually offer the most competitive rates in New England.