2018 Homeowners Insurance FAQs
This information was put together by general questions asked by users and answered to the best of our ability. For more personalized responses, contact your homeowners insurance company about your policy.
What is Homeowners Insurance?
Homeowners insurance provides coverage for your home and compensates you for any damages or home losses. In case of a burglary or if your home is partially or entirely damaged by a cause that is insured by your homeowners insurance policy, the company will assist you with the replacement of your household belongings, repair your home or event rebuild.
There is an add-on coverage that you can choose to have on your policy, liability coverage. This protects you, the homeowner, in the event that someone is injured or hurt on your property. In addition, it can help you in most cases where there is property damage through negligence. As always, the amount that is compensated depends on the limits set on your policy that you are paying for.
Should I Get Homeowners Insurance Before or After A Home Mortgage?
Ideally, the purchase of homeowners insurance should be done before contacting a mortgage company for a home loan. It is required by some to have insurance prior to getting approved for a home loan.
It is important to keep your options open and shop around with your budget in mind. There are more simple ways to shop around for the best homeowners insurance with great rates in just one place, here.
Am I Required to Have Homeowners Insurance?
Mentioned above, many mortgage lenders will approve you only if your home is insured. In some states, it is required but not in others even if you don’t have to it is always an excellent way to protect your home. Purchasing a home is one of the biggest investments you will make, don’t risk losing it.
Why is Homeowners Insurance Important to Have?
There are numerous reasons it is important to have homeowners insurance:
Depending on your set limits, any substantial repair or rebuilding on your home or belongings is possibly covered by your insurance policy.
Imagine owing money on your mortgage and your home is destroyed, you will still be liable to pay it off… Well, that’s only if you do not have adequate homeowners insurance. If you do, then the insurance can support and help pay for the rebuilding costs or if your home is insured at full replacement cost value then you will have means to entirely rebuild.
Liability coverage is the single most important aspect of homeowners insurance. Imagine, something happens to one of your co-workers at your Halloween Party and she has to go to the hospital. If you have liability insurance, it will cover her medical expenses along with your legal fees, assuming she sues.
What Does My Homeowners Insurance Policy Cover?
- Property Damage: This can be anything from destruction to your home or any detachment from the structures. Natural storms including hurricanes, tornados, earthquakes or floods can be excluded. Make sure you always check the exclusions on your personal homeowners insurance policy. Depending on your limits, you will be compensated for your home or storage shed in case of damage.
- Personal Property Loss: This includes any damages or acts of theft of your personal property that your policy can cover. If you happen to have other valuables including antiques or any collectibles that are not included in your policy as special endorsements, they may not be covered. In the standard limits, it is usually an add-on for the valuables you’d like to be compensated for in case of theft or damage.
- Personal liability: Your homeowners insurance policy can protect against any accident, injury or property damage caused by you, a family member or even your pet. The damage can include anything from medical care to repair of personal property, it is generally covered up to your liability coverage. In an event of any unwanted lawsuit, you want to make sure with your insurance company that you have enough protection and adequate limits that shelters your finances.
How Much Does Homeowners Insurance Cost on Average?
Depending on your homes value and the amount of coverage you’d like on your home and belongings will ultimately determine your premium for the year. Insurance companies take into consideration the crime rate in your area as well as your past claims.
There are quite a few factors that come into play when your home insurance company quotes you, but a typical annual premium can be priced anywhere from $400 to $1500.
How Can I Lower My Homeowners Insurance Premium?
It is a plus to have your home guarded against theft or other accidents that may cause your homeowners insurance to pay.
If you’re thinking of ways you may be able to act on to lower your premium, read below:
- Install a security system in your home that has outside signals and connection to local police
- If you smoke in your home, then the simple response is to stop
- Install smoke detectors along with a sprinkler system for a fire
- If you have a fire alarm already then check it out to see if it alerts the local fire department in your area
- Ask your insurance company about saving by bundling your home and auto insurance
Along with many other simple ways to reduce your premium.
Can My Insurance Company Cancel My Homeowners Insurance Before My Policy Term Ends?
Cancelation of your policy before your term ends is due to the following reasons:
- Premium unpaid
- An increase of hazard by the homeowner (i.e. illegal storage of fireworks, not fixing a gas leak)
- Vandalism or damages due to the property being vacant for more than 60 consecutive days
- Material misrepresentation