As a homeowner, protecting yourself, your family, your home, and your assets should be high on your list of priorities. A burglar or intrusion alarm system can go a long way for safety, but home insurance is a necessity to help ensure you don’t suffer losses due to vandals and thieves, and to ensure you don’t lose your home in a fire, earthquake, or other disaster.
Home insurance is designated to cover private homes and properties, and it serves as peace of mind during a time of crisis. Almost all mortgage companies stress the necessity of having a home insurance coverage, and it should cover the total fair value of the property.
How Does Home Owners Insurance Work?
Home insurance comes in a few varieties—two common forms are homeowners insurance and mortgage insurance. Before taking out a mortgage on the home you plan on buying, your lender will require you to have these types of insurance to ensure your home will be repaired or rebuilt in the event of a catastrophe.
- To provide property coverage—Mortgage holders’ protection covers the actual construction of your home and your property if it gets harmed or obliterated.
- To satisfy your mortgage lender—As aforementioned, most mortgage lenders will not offer you a mortgage if you do not have a home insurance cover. You are required to list the insurance as the mortgagee in the policy.
Types of Home Owners Insurance
To be compensated for damage to your property, a covered threat must have caused loss or damage to your property. For example, if you are insured against fire and floods destroy your home, you get no reimbursement. The most common types of homeowners insurance policies are:
Basic Homeowners Insurance – Standard home insurance offers dwelling coverage and personal property coverage, along with other protection such as personal liability coverage—it protects against basic perils such as theft, vandalism, smoke, fire, explosions, etc.
Broad Form Home Insurance – Insures your home against basic perils listed above, along with less common (but equally potentially devastating) threats, such as: frozen pipes, hail, riots, windstorms, damage from the weight of snow or ice, and more.
Special Form Coverage – This is a very common policy that is popular among homeowners across the nation. Instead of listing what a policy covers, this policy covers against common forms of loss and damage—it only doesn’t protect against specific perils that are outlined in the agreement. Common perils not covered often include damages from war; damage caused by insects, rodents, and birds; damage caused by fungus, bacteria, etc.; floods, and more. Your insurance agent can outline specific perils that aren’t covered, and you can opt for additional insurance to cover against some of these other perils if needed.
Renter’s Insurance – Covers personal belongings and individual obligations. This is an insurance cover for tenants living on leased or rented property. It is often required by landlords to reduce their legal liability and avoid disputes in case a tenant’s belongings are damaged while they’re staying on the property.
Condominium Owner’s Insurance – Also referred to as condo insurance, this coverage helps protect an individual condo unit or townhouse. Since the condo owner owns the interior of the unit (the walls, ceilings, floors, counters, etc.), this allows them to protect their property and and provides liability protection.
Mobile Home Insurance – This form of insurance is specifically for owners of mobile and manufactured homes. This type of insurance is customized for your needs and generally covers similar perils as special form insurance.
Miscellaneous Insurance – While the forms of coverage listed above are the most common, there are other forms of homeowner’s insurance. Popular forms of insurance include old home insurance, dwelling fire insurance, and flood insurance. To ensure your home is fully protected from various threats and perils, be sure to discuss your options with your insurance specialist.
There are other forms of home owner’s insurance that include policies for older homes and dwelling fire forms.
Limits of Coverage
It can be difficult to determine exactly how much insurance you should have, but fortunately you don’t have to figure it out on your own. Your protection specialist will help you decide how much coverage you need, and what types of coverage will be best based on your needs, goals, and budget.
Choosing the right insurance for your needs can feel overwhelming, but it doesn’t have to be. A knowledgeable local insurance agent will be able to work with you to determine how much coverage you need, and against what types of perils (i.e. do you live in a flood zone?). If you’re looking for insurance in San Marcos, TX, the friendly specialists as Matt Patterson Insurance Agency can help you get the coverage you need, contact us today to discuss your situation or get a home insurance quote!