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May 10th, 2017

Home Insurance FAQ

If you are looking to buy a new home, you’ll also need to secure home insurance. In fact, you’re generally required by law to purchase insurance on the home.

You can’t go without it, and securing sufficient coverage is essential to protecting what is likely your biggest asset. Here’s what you need to know about home insurance.

What is it?

Also called property insurance, home insurance covers your home and offers compensation to you in the event that you lose your home to a fire, it’s burglarized or other damage occurs. With a solid policy in place, your insurance will help you replace contents of the home that are lost and even make repairs or rebuild the home if necessary.

A home insurance policy also provides liability coverage to protect the homeowner in case an individual is injured while on your property and you are found to be responsible for that injury or damage to the property.

The total amount of damages your policy covers depends on its limit, so it’s important to work closely with your insurance agent to purchase comprehensive coverage.

These 5 Insurance Tips for Arizona residents will help you choose the right amount of protection.

What does it cover?

A home insurance policy will cover a variety of risks that can occur that would be a challenge for you to cover financially, including:

  • Property damage. The destruction and damage to your home (or detached structures) are included, and you will be compensated according to the limits of the policy. Some of the events a policy could cover include vandalism and hurricanes, but events like a flood and earthquake are commonly excluded.
  • Personal property loss. This element of the policy includes the theft of your personal property or damage to the home, as much as the limits of the policy allows. Be aware that if you have valuables like antiques or collectibles in your home these are typically not included in the personal property loss. You’ll need separate riders for such valuables.
  • Personal liability. If someone in your family, and that includes a pet, causes injury, an accident or property damage, the policy will cover you. The coverage will have a liability limit and will take care of things like property repairs and medicare care.
  • Added living costs. If, for some reason, you are unable to live in the home, the policy will pay for alternative arrangements for you and your family over the period of time that home is being rebuilt or repaired.
How does it work?

Home insurance acts as a safety net for the structure. Keep in mind that damages and repairs can total hundreds of thousands of dollars. If you had to pay for this out of pocket, it’s likely that it would devastate your personal finances and put your home in jeopardy.

With home insurance, your coverage will kick in. You file a claim and the policy will cover your belongings and the contents of the home, as well as the home itself.

What are my benefits?

The benefits of your policy depend on a variety of factors, which include:

  • Your policy’s limits on your belongings and the structure.
  • The deductible amount you have to pay prior to the coverage becoming active.
  • The type of coverage on your policy, and whether it’s for the cash value or the replacement value of the home.

Don’t take home insurance for granted. Work closely with your insurance agent to choose the optimal coverage that meets your needs, and you can have peace of mind that your home is covered  –  no matter what happens.

What questions do you have about home insurance?