Home insurance, also known as homeowners or hazard insurance, is the insurance that covers your home in cases of theft, fire, accidents and so on. As car insurance covers accidents but not the usual maintenance, your home insurance will cover you if your roof is damaged during a storm, but not the usual wear and tear as happens to roofs over time.
How do I get home insurance?
Home insurance is relatively easy to find, and many times the same company that covers your auto insurance has homeowner insurance packages to offer as well (many companies even offer a discount when you bundle the two together). While it is easy to find however, purchasing home insurance can be a bit more tricky. And it’s best to begin as soon as your purchase agreement is signed. Just as you can’t drive your new car off the lot without car insurance, you cannot take possession of your new home if you don’t have homeowners insurance at the time of closing.
There is a certain amount of information required in obtaining home insurance quotes. For instance, you will need to know the location of your new home, when the house was built, the square footage, how old both the electrical and plumbing is, what type of roof your new home has, and how many home insurance claims the seller has made on the home in the past 5 years. It’s also a good idea to know if there is a fire hydrant on your block and where the nearest fire department is located as some insurance companies may refuse to insure your home if you are located in an area considered to be rural. Not to worry though; there are insurance companies out there to cover your home if this is the case. The quote may take a little longer to obtain though.
What does home insurance cover?
Home insurance typically is broken down into four parts: dwelling (your house), other structures (a detached garage, patio, fence, etc.), personal property (the items contained within your home), and loss of use. Note that home insurance does not cover your land. So if you’re a farmer and your neighbor’s house fire destroys both your home and your crop, your homeowners insurance only covers your home, other structures, and personal property. And with your loss of use coverage, your policy covers any living expenses incurred while repairs are being made to your home or because of government order.
Dwelling coverage covers your home itself and anything “belonging” to the home such as plumbing, wiring, heating, and central air. If the neighborhood kids drive a ball through your plate glass window, your homeowners insurance covers it. Other structure coverage covers anything not attached to the house such as a detached garage (an attached garage is covered in the dwelling coverage), a patio, driveway, fence, etc. If a tree falls during a thunderstorm and mangles your privacy fence, again, your homeowners insurance will cover the cost of repairs. Personal property is anything normally contained within the home such as electronics, artwork, jewelry, etc. If your home is burglarized while you’re in Bali, again, you’re covered by your homeowners insurance. However, some items such as firearms, artwork, jewelry, electronics, and a few others may have certain coverage limits under your basic policy. That’s why it’s a good idea not only to ask about additional personal property coverage (usually referred to as scheduled personal property), but to review and update your home insurance policy every few years.
I have a cabin in the woods. Can I insure it on the same home insurance policy?
Endorsements are also available on home insurance policies at an additional cost. Certainly you can have your summer home insured on the same policy. You can also have a guaranteed replacement cost endorsement, inflation guard endorsement, and even endorsements to protect you from identity theft. Talk to your agent to find out more about these endorsements or more.
But wait, there’s more!
Now that we’ve covered the property protection part of your policy (say that three times fast!), we’ll discuss the liability protection part of a home insurance policy.
ACK! My neighbor tripped coming up my front steps and is suing me!
Your neighbor may be infamous around the neighborhood for being a Class A Klutz, but if he or she broke an ankle walking up your front steps and is now suing for medical costs, your homeowners insurance policy can help. The Personal Liability section provides coverage for a claim or lawsuit as a result of an accident to you or others on your property. Your Medical Coverage section will also cover any medical expenses someone other than members of your household incurs due to an accident on your property. Furthermore, if your family is visiting your mother-in-law in Duluth, and little Joey kicks his soccer ball through her storm door, relax. Your homeowners insurance policy will cover that, too. Just note… if sweet little Jenny is practicing driving up and down your mother-in-law’s driveway and hits the house, that’s something for your auto insurance to handle, not your homeowners.
With all of this coverage and protection, is it any wonder you can’t close on your new home without an insurance policy?
