FAQs and Answers About Homeowners Insurance
Generally, insurance benefits everyone under its umbrella in various ways. Homeowners insurance covers your home, your belongings, and you in case of damages, losses to your property, vandalism, liability, or personal injuries sustained within your home. However, understanding how this type of insurance works can be tricky at first, so you may have some questions about it.
To help you get answers to these common questions about homeowners insurance, we’ve prepared this comprehensive list of some FAQs and answers. If you’re looking to ensure you get the right policy or learn more about homeowners insurance in general, read on the top five frequently asked questions and answers about homeowners insurance.
What Does It Cover?
Homeowners insurance is a contract between you and your insurer outlining what damages or losses are covered by your policy. This type of insurance typically covers losses such as fire, windstorms, hail, theft (burglary or robbery), car accidents, and other events. Each state has its unique law regarding what is covered by insurance. Depending on where you live, items like earthquakes or floods may also be included in your policy.
Does Insurance Protect Homeowners Against Lawsuits and Liability?
Typically, homeowners insurance will provide you with protection up to a certain amount if someone files a lawsuit against you as a result of an accident that occurs at your home or is otherwise related to your home. An example would be if someone slips on your sidewalk and sues you because they got hurt due to your negligence.
How Much Does It Cost?
Homeowners’ insurance costs will vary in price depending on where you live, but the average cost can range from $781 to $3383 per year. It’s common for those with specific risks (such as a pool or trampoline) to pay more. For an average home that isn’t at high risk of fire or theft, expect your homeowners’ insurance premium to align with these averages.
How Do You Choose a Company for Your Policy?
While you may have a general idea of which companies in your state offer homeowners insurance, it’s important to make sure you understand what each policy entails. Here are some factors to consider before choosing a company:
- If the insurance covers your home’s specific structure
- If it’ll pay for flood damage or protect you from water damage
- What if a tree falls on my roof?
- If there’s coverage for earthquakes or wildfires
When Do You Need to Obtain Homeowners Insurance?
The best time to get insurance is before you need it. It’s highly recommended that you get homeowners insurance as soon as you purchase a house, even if it’s a fixer-upper. This way, in case of a catastrophe (fire, flood), you can rebuild your home without going into debt. If you take out an adjustable-rate mortgage, it’s also worth noting that most lenders require policyholders to carry coverage up to specific loan-to-value ratios.
Endnote
Homeowners insurance protects your home from damage and destruction caused by natural disasters and from vandalism or theft. It can be a bit intimidating when you start reading about all the available coverages with all the possible scenarios that could cause damage to your home or belongings. The more you know about your policy, the more comfortable you’ll feel when something happens to your property. Take the time to educate yourself to make an informed decision when you’re ready to purchase your policy.
This article has been published in accordance with Socialnomics’ disclosure policy.
