Homeowners Insurance

 
 

Homeowners Insurance Explained

Homeowners insurance is a type of property insurance that provides financial protection for your home and belongings against damage, theft, and liability risks. It is typically required by mortgage lenders but is also essential for homeowners to safeguard their investment.

What Does Homeowners Insurance Cover?

Homeowners insurance policies usually consist of the following key coverages:

  1. Dwelling Coverage

    • Protects the structure of your home, including walls, roof, and built-in appliances, from covered perils like fire, windstorms, and vandalism.

  2. Other Structures Coverage

    • Covers detached structures on your property, such as garages, sheds, and fences.

  3. Personal Property Coverage

    • Reimburses you for the loss of personal belongings (e.g., furniture, electronics, clothing) due to covered risks like theft, fire, or storm damage.

  4. Liability Coverage

    • Provides financial protection if someone is injured on your property and sues you or if you cause damage to someone else’s property.

  5. Loss of Use (Additional Living Expenses – ALE)

    • Pays for temporary housing and additional expenses if your home becomes uninhabitable due to a covered disaster.

Common Perils Covered:

✔ Fire and smoke
✔ Windstorms and hail
✔ Lightning strikes
✔ Theft and vandalism
✔ Explosions
✔ Falling objects

What’s Not Typically Covered?

✖ Flooding (requires separate flood insurance)
✖ Earthquakes (requires separate coverage)
✖ Mold, wear and tear, neglect
✖ Pest infestations (e.g., termites, rodents)

Types of Homeowners Insurance Policies:

  • HO-3 (Most Common): Covers most risks except for those explicitly excluded.

  • HO-5 (Comprehensive): Offers broader coverage, often with fewer exclusions.

  • HO-6 (Condo Insurance): Covers personal property and parts of the unit the owner is responsible for.

  • HO-8 (Older Homes): Designed for historic or high-value homes that may cost more to repair.

How Much Homeowners Insurance Do You Need?

  • Coverage should be enough to rebuild your home if completely destroyed.

  • Consider additional coverage for high-value personal items (e.g., jewelry, art).

  • Add liability protection if you have a pool, trampoline, or frequent visitors.