|A home can require a tremendous investment of money, time, and energy.
Homeowner's insurance is designed to protect that investment by insuring the
actual structure or structures and the personal possessions in and around
them, and providing liability protection for the residents. Through
homeowner's insurance, you can protect yourself and your family from
enormous loss in the event of damage or destruction to your home and
Homeowner's insurance is divided into seven basic
policies. Some policies
are defined by the perils they insure against, and others are defined by
whom they insure.
basic homeowner's policy protects against losses from 11 perils, such as
fire, wind, theft, vandalism, and so on. You can purchase more extensive
coverage to cover other mishaps. Losses due to events that have the
potential for more widespread destruction, such as floods, earthquakes, and
wars, are excluded from basic homeowner's insurance policies. You must
purchase separate policies to cover against such catastrophes.
basic policies will replace or repair your home and property for the
actual cash value. This is defined as the replacement cost minus
depreciation. However, more coverage is available and recommended in many
cases. Ideally, you would want to cover your home for its replacement cost -
or the cost to rebuild the home - which could be more than its actual cash
Most likely, if you have a mortgage on your home, you are
required to own
homeowner's insurance. Even if you own your home outright, insurance is a
wise way to protect it and your family from losses. If you are a renter, or
if you own a condominium or rental property, you can still protect your home
and property with policies designed to fit your needs.
insurance also covers against the loss of your personal
possessions, up to certain limits. For example, your furniture and
appliances would be covered, as well as clothing, jewelry, tools - anything
of value, even if it is lost or destroyed away from your home. Your personal
property is covered only up to certain limits. You can purchase additional
coverage for possessions that may be more valuable than the limits on a
is advisable to document your personal belongings prior to a possible
disaster. A written list, photographs or even a videotaped walkthrough of
your house can be helpful if you have to make a claim.
insurance also covers the insured with a certain amount of
liability protection. If someone is injured on your property, or suffers
property damage and you are found to be responsible, your insurance, up to
certain limits, will pay your lawyer's fees and any awards or expenses you
may owe the injured party. If you own property or have other significant
assets to protect, you may want to consider purchasing an umbrella policy
for extended liability coverage.
cost of homeowner's insurance depends on a number of factors. Premiums
are based on the value, location, and age of the home. The owner's age,
employment and insurance history, and other variables are also taken into
insurance is vital to the protection of your home. Understanding
the need for insurance and the way it is structured can help you guard your
investment and your family's well being.
© 2003 Emerald