What is ‘Homeowner’s Insurance’
Homeowner’s insurance is a form of property insurance that covers losses and damages to an individual’s house and to assets in the home. Homeowner’s insurance also provides liability coverage against accidents in the home or on the property.
INDEPENDENT INSURANCE ADJUSTERS
BREAKING DOWN ‘Homeowner’s Insurance’
When a mortgage is requested on a home, the homeowner is required to provide proof of insurance on the property, before the lending bank can issue him or her a mortgage. The property insurance can be acquired separately or by the lending bank. Homeowners who prefer to get their own insurance policy can compare multiple offers and pick the plan that works best for their needs. If the homeowner does not have his property covered from loss or damages, the bank may obtain one for him or her, at an extra cost. Payments made towards a homeowner’s insurance policy are usually included in the monthly payments of the homeowner’s mortgage. The lending bank that receives the payment, allocates the portion for insurance coverage to an escrow account. Once the insurance bill comes due, the amount owed is settled from this escrow account.
A homeowner’s insurance policy usually covers four incidents on the insured property – interior damage, exterior damage, loss or damage of personal assets/belongings, and injury that arises while on the property. When a claim is made on any of these incidents, the homeowner will be required to pay a deductible, which in effect, is the out-of-pocket costs for the insured. For example, a claim is made to an insurer on an interior water damage that occurred in a home. The cost to bring the property back to livable conditions is estimated by a claims adjuster to be $10,000. If the claim is approved, the homeowner is informed of the amount of his or her deductible, say $4,000, according to the policy agreement entered into. The insurance company will issue a payment of the excess cost, in this case $6,000. The higher the deductible on an insurance contract, the lower the monthly or annual premium on a homeowner’s insurance policy.
Every homeowner’s insurance policy has a liability limit, which determines the amount of coverage that the insured has should an unfortunate incident occur. The standard limits are usually set at $100,000, but the policyholder can opt for a higher limit. In the event that a claim is made, the liability limit stipulates the percentage of the coverage amount that would go towards replacing or repairing damage to the property structures, personal belongings, and costs to live somewhere else while the property is worked on.
Acts of war or acts of God such as earthquakes or floods are typically excluded from standard homeowner’s insurance policies. A homeowner who lives in an area prone to these natural disasters may need to get special coverage to insure his or her property from floods or earthquakes. However, most basic homeowner’s insurance policies cover events like hurricanes and tornadoes.
Homeowner’s insurance policy is different from a home warranty. A home warranty is a contract taken out that provides for repairs or replacements of home systems and appliances such as ovens, water heaters, washers/dryers, and pools. These contracts usually expire after a certain time period, usually 12 months, and are not mandatory to have in order to be issued a mortgage. While a homeowner’s insurance does not cover damages that result from poor maintenance or inevitable wear and tear, home warranty covers such issues.
A homeowner’s insurance policy also differs from a mortgage insurance, which is typically taken on home buyers making a down payment of less than 20% of the cost of the property. Mortgage insurance covers the lender for issuing a loan to a home buyer who otherwise, might not be able to get the loan required. Basically, a homeowner’s insurance protects the home owner and a mortgage insurance protects the lender.
Homeowners Insurance Quote Forms
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Homeowner Flood Quote
Homeowners Quote Form
Manufactured Quote Form
Homeowners Insurance Customer Service Options
Self policy service any time of the day, directly from our website. To request a policy change on your account, click any of the following policy service options below.
Property Loss Claim Form
Homeowners Insurance Information
Because everyone’s needs are not the same, it is best to consult your agent to help assess your needs and find the insurance policy that is right for you.
What is Homeowners insurance?
Homeowners insurance provides financial protection against disasters. A standard policy insures the home itself and the things you keep in it.
Homeowners insurance is a package policy. This means that it covers both damage to your property and your liability or legal responsibility for any injuries and property damage you or members of your family cause to other people. This includes damage caused by household pets.
Damage caused by most disasters is covered but there are exceptions. The most significant are damage caused by floods, earthquakes and poor maintenance. You must buy two separate policies for flood and earthquake coverage. Maintenance-related problems are the homeowners’ responsibility.
Why do you need homeowners insurance?
It is really all about protecting yourself financially if something unexpected happens to your home or possessions. That’s important because chances are your home is likely one of your largest investments.
If your home was destroyed by fire or damaged by a natural disaster, you’d need money to repair or replace it.
If a guest in your home is injured, liability protection and medical coverage help pay expenses.
If you are a victim of theft and vandalism, it can reimburse you for your loss or pay for repairs.
If you are still paying for your home, your lender will require insurance.
It is important to know that homeowners insurance is meant to cover unexpected damage, not routine maintenance. Ask your agent to talk about what is covered and be sure to read your policy so you know exactly what’s included and what is not.
Things to consider and questions to ask your agent
Here are few things to discuss with your agent that will influence your decisions.
How much will it cost to rebuild my house and replace my belongings if they are damaged or destroyed? (Ask your agent to talk you through your home’s features and the things you own so you can make an informed decision about coverage.)
Does the insurance company have a good reputation for customer service? Is it known for paying claims fairly and promptly?
What discounts are available? (Ask about multiple policy, security system and fire resistance discounts.)
Homeowners insurance policy
What is ‘Homeowner’s Insurance’