Prestige Professional Management
Your Consumer Resource Specialist
Homeowners Insurance
Why Should I Have Homeowner's Insurance?
Homeowner’s insurance pays for losses and damage to your property if something unexpected happens, like a fire or burglary. When you have a mortgage, your lender wants to make sure your property is protected by insurance. That’s why lenders generally require proof that you have homeowner’s insurance.
Standard homeowner’s insurance doesn’t cover damage from earthquakes or floods, but it may be possible to add this coverage. Homeowner's insurance is also sometimes referred to as "hazard insurance".
Many homeowners pay for their homeowner’s insurance through an escrow account as part of their monthly mortgage payment. You make the payments to the lender, and the lender holds the part of the payment that is for insurance in an escrow account. Then, when the bill for the insurance is due, the lender pays it from the escrow account.
The cost of your homeowner’s insurance, as well as any similar insurance to protect the property, is listed on page one of your Loan Estimate, in the “Projected Payments” section. However, it’s usually a good idea to do your own research about how much homeowner’s insurance costs. You can shop separately for homeowner’s insurance and choose the provider and plan that is right for you.
If you don’t have insurance, your lender is allowed to buy it for you and charge you for it—but your lender must give you advance notice. If your lender buys insurance on your home because you did not keep up your homeowner’s insurance, that insurance may only cover the lender, and not you. It also may be more expensive than what you could buy on your own.
Homeowner’s insurance protects your property. While a standard homeowners policy helps protect your house, it typically helps cover more than just the physical structure of your home. From your personal belongings to the shed in your backyard, or even medical bills if a guest is injured on your property, a standard homeowners insurance policy may include the following coverages:
Dwelling coverage
If your home and any attached structures, like a deck or garage, are damaged by a covered peril, dwelling coverage helps pay for repairs. The amount of dwelling coverage you need is usually calculated by the square footage of your house and what it would cost to rebuild your home. This is not necessarily the market value of your home.
Other structures coverage
The other structures coverage in your policy helps pay for repairs or replacement for detached structures on your property, like a fence or shed, if they are damaged or destroyed by a covered peril.
Personal property coverage
Personal property coverage helps pay to replace certain belongings, such as furniture and electronics, that are stolen or damaged by a covered loss.
Personal liability coverage
If you or a family member are found legally responsible for accidentally damaging someone else's property or injuring someone, liability coverage may help pay for related repair costs and legal fees, in addition to helping with medical bills.
Guest medical protection
If a visitor is accidentally injured at your home, your policy's guest medical protection helps pay for their resulting medical bills.
Additional living expenses coverage
If you cannot stay in your home after a fire or other covered claim, your homeowners insurance coverage may help pay for temporary living costs, such as hotel bills.
It's important to keep in mind that coverages come with limits which is the maximum amount your insurance policy will pay toward a covered claim. When selecting your coverage limits, be sure to consider things like the potential cost of rebuilding your home or replacing your belongings. That way, you can be better prepared if your home or belongings are damaged or destroyed by a fire or other covered peril.
Remember that many coverages have deductibles, as well. A deductible is the amount you must pay before your insurance benefits kick in to help reimburse you for a covered claim.
Having a homeowners insurance policy won't prevent damage to your home or belongings, but it may help provide a financial safety net if the unexpected occurs. Don't delay. Get your quote today!
