Homeowners Insurance

Your home may be one of your largest investments, and you understandably want to protect this nest egg as much as possible. While property values may increase over the years, damaging events can result in financial loss and can eat away at this equity. For example, your home may be damaged through a major storm, a flood, a fire or many other devastating events. Buying homeowners insurance is a popular step that most property owners take to reduce the financial impact of these types of events.

A home insurance is a type of policy that coverages damage or losses related to the property. The land is typically not insured, but all improvements on the property are. When these improvements are damaged in some way, you can file a claim on your home insurance policy. Through the claim, you may receive financial compensation that pays for the repairs, restoration, cleaning and more of the property. Remember, however, that you will need to pay for the insurance deductible. Your homeowners insurance deductible may be as much as one to two percent of the replacement value of the home. Because this can be a substantial amount of money, you should keep an amount equal to the insurance deductible in place. This will help to ensure that you can afford to file a claim when the need arises.

There are variations in these policies that you should be aware of. For example, most of these policies have a liability component, and this component will pay for another person’s expenses if they are hurt on your property. These policies also usually will pay to repair or replace your structures if they are damaged or destroyed. Some options you may find include coverage that pays for the replacement of your personal property or that pays for a temporary home or hotel for you to stay in while your home is being repaired. As you can see, the right policy can dramatically reduce your out-of-pocket expenses related to property damage. Now is the right time to take a closer look at the different homeowner coverage policies available to choose from.