House insurance

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.

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.

You’re just one quick and easy search away from seeing multiple home insurance quotes — it’s never been easier to find the right policy.

What’s home insurance?

If your home is your castle, then home insurance is your knight, preserving against misfortune and plunder — or at least fire, theft and other property hazards.

As the saying goes, good things come in threes, and you can choose between buildings insurance, contents insurance, or a combined buildings and contents policy.

The difference? Buildings insurance covers the bricks and mortar, while contents is everything that would fall out if you took the roof off, turned your gaff upside down and gave it a shake.

Get informed

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Work out what locks you have

Should I take out building insurance?

We don’t want to scare you, but your home could be damaged by:

Flood

Fire

Subsidence

Vandalism and criminal damage

Weather damage

But luckily, your building insurance should cover these ‘perils’.

Do you own a bungalow? A terrace? A semi a farmhouse or a palace?

Then it’s likely you’ll need buildings insurance to protect it from all these dangers.

If you’re a tenant, you’ll probably only need contents cover.

Do I need contents insurance?

Contents insurance will protect all your prized possessions from theft or damage when they’re in your home.

You could also choose a policy that has ‘personal possessions cover’, either as standard or bolted on as an optional extra, to safeguard your stuff when you take it with you out and about.

Home insurance you can trust

You don’t need to take our word for it.

When you search with GoCompare you’ll have access to advisory Defaqto star ratings to help you pick a policy that’s hot to trot with all the features you need.

You’ll know all about the level of cover, features and benefits each policy offers before signing up.

Ready to get a home insurance quote?

To get a home insurance quote, you need to make sure you have a few bits of information about your abode to hand first.

We’ll help you every step of the way, but be ready to answer questions about the people living there, the ownership status, claims history, whether any occupants smoke, and if the property is left unoccupied, plus basic personal details, and more technical details about your home:

Approximate age of the property

Wall and roof construction

If it’s a listed building

Distance from water

Business use

If it’s up for sale

State of repair and ongoing building work

Central heating

If it’s self-contained or has extensions, garages or outbuilding

History of subsidence, landslip, heave or tree damage

You’ll also be asked about the types of locks that are used on external entry points.

If you’re unsure, we’ve got a guide and video that’ll help you easily identify your locks.

For contents cover, you’ll need to estimate the value of your possessions and for buildings cover you’ll have to state your home’s market value and rebuild cost.

Luckily, we’ve got helpful guides and tools on all this and more stashed in our Home insurance loft — an area dedicated to home and contents information.

Need to know more about home insurance?

Home truths

In 2017, 56% of householders said they had last switched more than a year ago, potentially missing out on cheaper premiums

In 2017, 28% of householders say they’ve never switched home insurance

If you’re still in the dark about how to protect your home’s unusual features or safeguard against the elements, GoCompare has a catalogue of home insurance guides and videos to illuminate your way.

And, if you need to get informed about expensive issues such as flooding, security, fire, damaged pipes, subsidence risk and weather damage, our guides can answer a lot of questions and point you in the right direction.

We discuss the bells and whistles of add-on cover, such as accidental damage cover, home emergency protection, legal expenses or cover for possessions outside the home, so you can decide if you need it, or not.

Read more about bicycle insurance, jewellery cover, freezers, DIY, matching sets, and digital downloads, flat insurance, garden insurance, flat roofs, thatched roofs and mobile phone and gadget cover, and you can try our top tips for saving even more money on home insurance quotes.