Understanding homeowner insurance
A home is usually the largest purchase you will make. Protecting this major investment can be important to your family’s financial future.
If you have a mortgage, your lender will require you to have homeowner insurance. If you do not have a mortgage, it is a good idea to protect your investment and buy homeowner insurance.
What it covers
Homeowner insurance pays for damage to your home and other structures on your property. It also may cover:
- Damage to or loss to contents of your home
- Your liability for accidents that occur on your property or for damage to others’ property.
What it does not cover
- Floods: You can buy flood insurance through the National Flood Insurance
Program. You must buy through agent. You can get a referral at 888-379-9531
- Earthquakes: You can buy earthquake as a separate endorsement to your homeowner
or renter policy or as a stand-alone policy that is separate from your homeowner
- Landslides (earth movement) are not covered. This type of coverage may be
difficult to obtain. Talk to an agent.
- Cannabis related
properties: There may be coverage gaps when insuring cannabis related
Create a home inventory
More than half of Americans said they don't have a list of their possessions according to an National Association of Insurance Commissioners (NAIC) survey. Without an accurate inventory, you may not have the right home or rental insurance coverage. Because needs change, you should create an inventory of your possessions every year. Without this checklist, you may forget to claim items lost due to fire or another covered event.
The NAIC offers the myHOME Scr.APP.book app to help you capture images, descriptions, bar codes and serial numbers of personal possessions and stores the information electronically for safekeeping. The app organizes information by room and creates a back-up inventory for email sharing. Be sure to share the inventory with your agent or insurer. Periodically update the list as you acquire new things.
Renter insurance covers your belongings and personal liability in the same way that a homeowner policy does. Since the building is not covered, the premium is low.
Typically, the owner’s policy that covers the building you live in does not offer any protection for your property, your cost to find other housing, or your personal liability.
If you rent an apartment or a home, your lease will not always require you to have renter insurance. Without it, however, you are often left out in the cold if the building is damaged. Renter insurance will also cover you if someone is injured in your home or elsewhere due to your negligence.