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Homeowners Insurance

Homeowners insurance is designed to protect homeowners from financial loss related to a wide range of potential issues and events. Many homeowners have a considerable amount of equity available in their home, and some also have significant debt in the form of a mortgage-linked to their property. In the event of a total loss situation such as with a devastating fire, the homeowner may have no financial ability to rebuild the home, but he or she would be liable for the debt on the home. This can be a stressful financial situation to be in. However, a home insurance policy can provide the homeowner with funds to repair or replace the property to minimize loss.

A homeowners insurance policy pay include coverage for events such as fire, flooding, weather-related damage, theft and more. Some policies cover damage against all perils except named exclusions. Other policies cover only named perils with no exceptions. If you are purchasing a new policy, it is important to understand how your coverage works. Keep in mind that you will be responsible for paying the deductible on the insurance policy each time you file a claim. A typical deductible amount may be as much as one to two percent of the insured amount, which is usually the replacement cost for the home. As you can see, this can be a rather large deductible to pay, so all homeowners should have the financial means to pay the deductible at a moment’s notice.

Many mortgage companies require their account holders to purchase and maintain a minimum amount of home insurance for the entire time the mortgage account is active. Even when the home is owned free and clear without a mortgage, it makes sense for a homeowner to purchase coverage. This is because accidents and mishaps can occur that can cause tremendous damage to a home in a very short period of time. Without coverage, a homeowner may lose tens of thousands of dollars or more. Homeowners should also make a point to review coverage each year to ensure that the policy continues to meet their needs.






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