What to Know About Homeowners Insurance

Homeowners insurance is one of the first things to purchase for a new home. In fact, if the home is bought on a mortgage, lenders will require homeowners insurance to protect the home and ensure at the very least the loan is paid off. Since homes come in many shapes and sizes, homeowners insurance has to be very flexible to fit the needs of any property.

Homeowners insurance comes in several different forms with the main difference being the amount of coverage the homeowners insurance policy has. There is even an insurance policy that falls under homeowners insurance but is for people who rent their property. Renters insurance is essentially half a homeowners insurance policy, since it only covers contents and liability from personal injury, but not property damage. The property owner should have an insurance policy that covers the property itself.

For actual homeowners insurance policies for an owned home, there are several options. The basic homeowners insurance policy protects from eleven listed perils, however many states do not allow this type of coverage since it covers so little. Broad form homeowners insurance protects the property and enumerated contents from 17 listed perils, including fire damage, damage from vandalism or theft, and damage from vehicles. The special form homeowners insurance policy is the most common form of homeowners insurance. Special form homeowners insurance is provides coverage on a named exclusions basis instead of a named protection basis, however contents are still only protected on a name peril basis. Common exclusions are usually perils that occur very rarely, but are usually devastating, including floods and earthquakes. Premier homeowners insurance provides coverage from even more perils, also on a listed exclusion basis, and covers contents on a listed exclusion basis as well.

There are several different types of coverage in a homeowners insurance policy. Dwelling coverage protects the house. There is also coverage for other structures, which typically includes sheds or other outbuildings on the property besides a garage. Coverage for other structures on a homeowners insurance policy is limited at 10-20% of the dwelling coverage. Personal property coverage protects the contents of the dwelling and typically over half the dwelling coverage is required to protect contents in the homeowners insurance policy.

Homeowners insurance can be a very difficult to choose, especially since there are so many different variables to a homeowners insurance policy. There are even special kinds of homeowners insurance policies for special properties not discussed in this article. For help finding the best homeowners insurance policy for your property, contact an independent insurance agent. Independent insurance agents can use their connections with affiliated insurance providers to find the best homeowners insurance policy for your home.

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