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Homeowners Insurance

Homeowners insurance is designed to protect the insured from damage or loss to their property when some kind of covered loss event happens. It is also meant to cover a property owner from liability resulting from damage or injury due to the policyholder’s negligence on his or her property. In many cases, homeowners’ insurance will cover losses or damages that happen off the insured property, as well. Most mortgage lenders require homeowners insurance.

Most homeowners policies include the actual structure and any personal items. If you have valuable personal belonging within the home, such as jewelry, art, a coin collection, etc., then you should purchase special coverage. Without special coverage, your insurer will likely only pay out to the limits of its maximum coverage, usually around $2,000, even for personal property that far exceeds that amount.

Keeping premiums down is possible by insuring your home for actual cash value rather than for replacement cost. However, if you purchased a home in 2005 for $500,000, it may be valued presently at $345,000. Should it be destroyed, it would be extremely unlikely to rebuild it for $345,000. For that reason, it’s usually wise to insure your home for replacement value, which would make it far more easy to rebuild.

For most, practically all that they own is within the walls of their home, and their home itself is their single greatest asset. Making sure that it’s fully protected it will provide enormous peace of mind.