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Homeowner’s Insurance Guide

By December 22, 2022Insurance

We know buying a homeowners policy is a major step in the home buying process and can be a troubling process if you are unaware of what to look for. Your home is your biggest investment, and you want to do everything you can to protect it.  The factors to consider when buying homeowners insurance can be overwhelming to the first-time buyer, and even to an experienced homeowner.  We have compiled a few of the major factors that homeowners need to decide on and how to go about making decisions based on the house you are insuring.

Your typical homeowner’s policy will have two main sections: Section I covers the property of the insured and Section II provides personal liability coverage for the insured. Generally speaking, anyone who owns, or leases property needs this type of insurance.  In most cases, in order to obtain a mortgage, a homeowner’s policy is required.

The first thing to consider when buying homeowners insurance is the type and amount of coverage you need.  The coverage needed on your house should be 100% of its replacement cost.  A common (and costly) mistake made when buying homeowners insurance is not buying enough coverage on your policy.  In the case of a disaster, most insurance companies will cover the full amount of the damage only if you have 80% coverage or more.  If your policy limit is less than 80% of the replacement cost of your home, any payment from your insurance company will be less than the full cost to replace your home – you’ll have to pay the rest out of your own pocket.

Your typical homeowners policy will have coverage for natural disasters like lightning, fires, hail, and windstorms as well as theft/vandalism.  These coverages are typically included in the standard homeowners policy, but what isn’t covered in your policy?   Events like hurricanes, termites, and flooding are not usually covered by your typical homeowner’s policy.  Events like tree-fall damage, water damage, plumbing issues, and mold are covered by certain policies but not always.  

Your home is your biggest investment, and understanding the policy that protects it is an important step in home ownership.  You should always speak with your agent about your policy to know exactly what is covered, and what isn’t.