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Buying Homeowner’s Insurance

Posted on November 15, 2011 by

What’s Homeowner’s Insurance?

Homeowner’s insurance is important for everyone to have, not just homeowners. Many mortgage companies, homeowner’s associations, and landlords even require you to have it.

Homeowner’s insurance protects you and your property by compensating you for damage to your stuff, your house, and you (such as from a lawsuit). Whether it is water damage, a friend falling in your house, or a natural disaster, you will be glad you invested in homeowner’s insurance.

Understand What Insurance Is

If you don’t understand how insurance works, you’re ripe to get ripped off.  Take a few minutes to learn the basics about insurance policies.  Then you’ll be ready to tackle hmeowner’s insurance in particular.

If you don’t have the time, here’s a quick and dirty run-down…  Insurance policies have five main parts: premiums (price), co-pays, deductibles, policy coverage/limits (the devil is in the details), and claims procedures.  All of these parts will work together to make a policy good/bad/expensive/cheap/risky/safe.

What Does Homeowner’s Insurance Cover?

Like with most other types of insurance, home insurance can come in many different forms, limited only by what you put in your policy.

You can buy varying types of coverage to fit your needs.  Here are some common protections:

  • Dwelling coverage protects your house. Some insurance policies can also be extended to cover any structure on your property.
  • Personal property coverage covers your personal belongings. This generally includes things inside your home, such as furniture and clothes. It is important to note that many plans do not cover extremely valuable items. Jewelry and other high-value collectables usually require additional coverage.
  • Liability coverage will protect you in the event that there is an accident on your property or related to your property. Liability coverage will pay for damages and medical costs.

How Much Does Homeowner’s Insurance Cost?

There are a lot of factors that will go into the price you pay for coverage.  These factors include, but are not limited to:

  • Your location (state, natural disaster risk, crime rates)
  • Your coverage needs
  • Your possessions
  • The insurance company
  • The age and current state of your home (learn how to get a home inspection)

In total you can be looking at yearly premiums ranging from $300 to well over $2,000.  Each company will differ, so you should contact multiple insurance companies to get quotes, if you want to find the most affordable policy.water walking ball

Learn more about how insurance policies work.