Owning a home is a dream for many people, but that dream can turn into a nightmare if something happens to damage or destroy your home, such as a fire or hurricane. That's why it's important to carry homeowners insurance to protect your investment.
What is it?
Home insurance is just what it says it is: it is insurance for your home. A homeowners policy covers your home against damage from a variety of named perils. It also provides you personal liability insurance to protect against things such as someone falling and injuring themselves on your sidewalk or your dog biting someone.
Who is it for?
A homeowners policy is for any person who owns a home and lives in it. If you have a mortgage, your lender will require you to carry home insurance, but even if your home is paid off, it is still a good idea.
How does it work?
A homeowners policy works like other kinds of property and casualty insurance. If you experience what you believe is a covered event, then you will contact your insurance agent to make a claim. An adjuster will evaluate the damage and determine whether it was caused by something that is covered in your policy. The insurer will then either pay the costs involved minus whatever deductible you are owed or it will issue you a check for the covered amount.
Different types of coverage:
Homeowners policies are pretty standard. They generally all cover things such as fire, wind and hail damage and exclude damage from flooding, earthquakes and unnatural acts, such as plane crashes. There are different endorsements and riders you can get to cover things that otherwise aren't covered, but they will cost more.
There are two main benefits to having a homeowners policy: protecting your home against damage from fire or weather and protecting yourself in case you are sued for personal liability for someone who is harmed on your property or by a child or pet.