Homeowners Insurance

Homeowners insurance is a type of insurance policy designed to protect you from financial loss due to damage, destruction or theft of their property if you own your home. A typical homeowners insurance policy provides coverage for your home and its contents, as well as liability protection if someone is injured on your property.

Several factors affect the cost of homeowners insurance.

• Location: Areas prone to natural disasters, such as hurricanes or earthquakes, typically have higher premiums.
• Property value: More expensive homes typically have higher premiums.
• Deductible amount: Choosing a higher deductible—the amount you must pay out of pocket before insurance kicks in—can lower your premium, but it also means you'll pay more in case of a claim.
• Coverage limits: Higher coverage limits generally result in higher premiums.
• Home features: Factors like the age of your home, its construction materials and safety features like security systems and fire alarms can influence the cost of insurance.
• Claims history: If you've made previous claims on your homeowners insurance or if the property has a history of claims, it can affect the cost of coverage.

To get an accurate estimate of homeowners insurance costs, contact insurance providers and request quotes based on your specific circumstances. They'll consider these factors and provide you with a personalized premium amount.

You may not end up with the best homeowners coverage if you comparison shop by price. Your home is one of the most important purchases you'll make, so take the time to understand your insurance before you purchase it. It's one of the most important decisions you can make for yourself and your family.

You'll need enough homeowners insurance to cover the cost to rebuild your home at current construction costs. This amount doesn't include the cost of the land and isn't related to the price you paid for your home or its current market value, tax value or loan amount. Keep in mind that the cost of rebuilding your home could be more or less than the price you paid or could sell it for due to changes in construction costs.

Here are some things to consider when choosing how much homeowners insurance you need:

• Local construction costs
• Square footage of the structure
• Type of exterior wall construction—frame, brick, stone or veneer
• Style of the house
• Number of rooms and bathrooms
• Type of roof and materials used
• Other structures on the premises, such as a garage or shed
• Fireplaces, exterior trim and other special features like arched windows
• Whether the house and parts of it, like a kitchen, were custom built
• Home improvements that have added value to your home

The 80% rule is a guideline used by insurance companies to determine the minimum amount of coverage you should have on your home. According to the rule, your dwelling coverage should be equal to at least 80% of the replacement cost value of your home. The replacement cost value is the estimated cost to rebuild your home from scratch, including materials and labor, in the event of a total loss. Note that the replacement cost value and the market value of your home are different. Market value includes additional factors like land value and location. If the dwelling coverage on your policy is less than 80% of the replacement cost value, you may be subject to a penalty called coinsurance—an amount minus the percentage of the actual cost of the damage, which is paid by the insurance company.

Homeowners insurance typically covers the dwelling or structure of your home and other attached structures, including your garage and deck. Here's a breakdown of typical coverages within a homeowners policy.

• Main dwelling: This coverage protects your home in the event of damage or destruction due to things like fire, lightning, windstorms and vandalism.
• Other structures: This protects structures on your property that aren't attached to your home, like a detached garage, shed or fence
• Personal property: Coverage includes your personal belongings like furniture, appliances, clothing and electronics in the event of theft, damage, or destruction due to covered perils both inside and outside your home
• Liability: This may cover legal fees, medical expenses and settlements or judgments if someone is injured on your property or if you accidentally cause damage to someone else's property.
• Additional living expenses: This coverage may help pay for temporary living expenses if your home becomes uninhabitable due to a covered loss—including hotel bills, meals and other costs incurred while your home is being repaired or rebuilt.
• Medical bills: This coverage protects your finances if a guest is injured on your property, regardless of who's at fault.

Homeowners insurance isn't required by law in most cases. However, mortgage lenders typically require buyers to obtain homeowners insurance as a condition of a loan to protect their investment in case of any damage or loss to the property. Even if you own your home, homeowners insurance is still recommended so you can have protection and peace of mind in the event of property damage, theft, liability claims or other unforeseen events. It may help cover the cost of repairs or to rebuild your home, replace personal property or cover legal expenses if someone is hurt while on your property.

Although they're similar, hazard insurance and homeowners insurance aren't the same. Hazard insurance is a component of homeowners insurance that specifically covers damage to your property caused by specific hazards or perils, such as fire, lightning, windstorms, hail or vandalism. It helps protect your home and its contents against these specific risks. Homeowners insurance is a broader policy that typically includes hazard insurance along with other coverages. It provides protection for your dwelling in addition to your personal belongings, liability coverage if someone is injured on your property and additional living expenses if your home becomes temporarily uninhabitable due to a covered event.

Most homeowners insurance policies cover a wide range of items, but they don't often cover everything one has. This void in coverage is usually due to the policy owner assuming that every item they have will be covered. They fail to let the insurance agent know of specialty items and specialty coverage they may need or be interested in. Talk with your insurance agent to decide whether you need additional coverage in the following areas:

• Fine jewelry and collectibles
• Home office equipment and home businesses
• Identity theft
• Excess liability (umbrella)
• Flood

No. While flood damage isn't covered by most homeowners insurance policies, we can provide a separate policy through the National Flood Insurance Program for additional coverage needs.

Most homeowners insurance policies have dollar limits on certain types of belongings. Generally, these limits are on silverware, guns, jewelry, watches, furs and computers. The limits usually cover losses of the average person. Talk to your agent or insurance company about increasing these limits to meet your individual needs.

Replacement-cost coverage within a homeowners insurance policy pays to replace your home and belongings with materials of like kind and quality at current prices, while actual cash-value policies reimburse the depreciated value.

Generally, insurance policies exclude damage caused by seepage, dry rot or vermin. This is because these problems are typically the result of poor maintenance rather than a sudden or accidental event.