Homeowner’s insurance is a policy that combines insurance protection on the home, its contents, and if selected, other specialized personal possessions of the homeowner. In addition, a homeowner’s policy will cover liability insurance for accidents that may happen on the homeowner’s property.
Home mortgage lenders typically require insurance be placed equal to the principal of the mortgage or the loan amount. It is vital that you have sufficient insurance, so that in the event of fire, theft or other perils, the dwelling is fully covered. A typical homeowner’s insurance policy covers the house, the garage and other structures on the property, as well as personal possessions inside the house such as furniture, appliances and clothing, against a wide variety of perils including windstorms, fire and theft. The degree of the perils covered will depend on the kind of policy one may have selected. An all-risk policy offers the broadest coverage and will cover all perils except those explicitly excluded in the policy. Typically, claims due to earthquakes, floods, and other acts of nature, or war are excluded. Special insurance can be purchased for these instances, including flood insurance and earthquake insurance.
The cost of homeowner’s insurance often depends upon what it would cost to replace the dwelling, its contents and any scheduled items attached to the policy.