Home Insurance

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. 

Damage caused by most disasters is covered but there are exceptions. The most significant are damage caused by floods, earthquakes and poor maintenance. 

What Is Covered by Standard Homeowners Insurance?

Most standard homeowners insurance policies include four essential types of coverage:

  1. Coverage for the structure of your home
  2. Coverage for your personal belongings
  3. Liability protection
  4. Additional living expenses if you are temporarily unable to live in your home because of an insured disaster

Why Is Homeowners Insurance Important?

 Homeowners insurance is important for a variety of reasons:

  • If you’re insured, any significant repairs or rebuilding after a disaster can potentially be covered by your insurance policy, up to your set limits.
  • If you owe money on your mortgage and your home is completely destroyed, you will still be required to pay your home loan, unless you have adequate homeowners insurance. Homeowners insurance can help pay for the rebuilding cost. If you insure your house at full replacement cost value, you will have the means to fully rebuild, if needed.
  • Liability coverage is arguably the most important aspect of homeowners insurance. If something happens to a visitor on your property, your liability coverage can cover that person’s medical costs, well as your legal fees if you are sued. Lawsuits are expensive and hiring a lawyer can cost thousands of dollars. If you’re found responsible, you could be ordered to pay large sums of money in a personal injury suit, a cost that can be offset by your liability coverage.

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