What is homeowners insurance?

Homeowners insurance is a policy of insurance which packages together several coverages to provide protection against disasters and/or resulting law suits from injuries sustained by others for a covered event. The real caveat here is covered event. What events are covered? Dog bites? Your child's friend breaks his leg on your unfenced trampoline.. maybe.. Your neighbor cracks his head on the diving board of your inground pool? What about tornadoes or floods? What if your washing machine catches fire while you're at the grocery store? The fact is, so many scenarios exist that insurance companies make a market by packaging up all a group of coverages to help you protect your home and sell it as a policy of insurance. This group of coverages is also referred to as home insurance or hazard insurance since it covers concisely specified damages to the personal property, in addition to providing several personal insurance protections. An absolute must for anyone who owns a home for there is no person or company outside of an insurance company that provides so much coverage for so little premium.  These policies commonly include property damages, personal liabilities, additional living expenses and even damage caused by domestic pets. Some of the insurance policies also cover the damages caused by natural calamities but with some exceptions. However, the maintenance and renovation expenses are the homeowner’s responsibility and are not covered in the insurance. A standard home insurance policy insures the house and its assets. Be sure to check with your insurance agent or company directly with any questions and never, ever listen to your cousin Brucie, the landscaper who tells you that you don't need homeowners insurance because only the company makes money on that...

 
Legally, homeowners insurance is a term contract that remains in effect for a fixed period of time.

The amount the homeowner pays to the insurance company is termed as a premium, which needs to be paid at the beginning or in multiple payments during the term specified in the contract which is generally one year. Premiums charged can be discounted through additional safeguards you take by adding an alarm system, dead bolting all doors, adding an indoor sprinkler system and more. Additionally, a sizeable discount is offered by many companies just for combining your car insurance with the same company. This is commonly called a package discount. One of the unwritten reasons this discount is offered is that insurance companies statistically have proven that the more policies you have with one company, the less like you are to switch insurance companies. This is known as persistency in the insurance industry. They only make a profit when you stay on the books long term and do not make a habit of making claims.  Homeowners insurance is considered as the safest and best way to protect your home investments. As a homeowner it is your responsibility to update the policy from time to time. Home insurance policies provide a sense of financial security and are must have for the homeowners and should be your first order of business when buying a home, refinancing or simply reviewing your policy.

 
In order to acquire a beneficial insurance policy you need to make an informed decision wisely considering your financial and insurance needs. You can save hundreds of dollars by shopping around for this multi-peril policy. The amount of coverage you want for your home is set by you. It is important to consider higher deductibles when buying a policy. At the same time do not hesitate in asking for discounts from your insurance agent, broker or company representative. When buying policy, be sure to purchase sufficient coverage to replace the house, any attached structures- such as a garage and everything in your home. Remember- your home is a vulnerable asset, it is therefore very important to get it insured BEFORE the unthinkable happens.