What does home owners insurance cover

Home owners insurance is required by your lender if you have a mortgage against your property. It will cover replacement of the property and help protect you against lawsuits.

If you would like your homeowners insurance to cover certain things such as flooding you need to consult your insurance agent to see if this is available for you. Most insurance carriers will have an insurance rider to cover certain types of flooding, but not all flooding. If your home is in a flood zone, then flood insurance would be required and this would be a completely different type of insurance.

When refinancing your insurance policy, you will need to be updated to reflect the new lender along with the new value of your home. Due to home improvements and or appreciation, it is recommended to have your policy reflect an accurate assessment of your homes value. This will further protect you from any undue loss in case of any unforeseen accidents or disasters.

Homeowners insurance will have a certain amount of coverage for someone else being injured on your property, such as by falling on an icy or wet sidewalk.

Most policies have riders available that will provide additional coverage depending on your needs. Some examples would be higher coverage and replacement limits for large amounts of jewelry, art, firearms, and other valuables you own.

You may also want to consider a personal liability umbrella policy to cover you should you be sued in a lawsuit. The umbrella policy will activate and protect you once your homeowners insurance has been exhausted.

Home owner's policies are often referred to as Hazard Insurance.

The property portion of a homeowner insurance is often covered as "replacement cost" basis. That is, should the home owner suffer a loss, the insurance carrier will pay an amount sufficient to restore the property back to its original condition with like materials, provided the homeowner purchased sufficient coverage. Therefore, it is important to review your hazard insurance policy every few years to ensure you have coverage amount of at least the "replacement value".

» DISCLAIMER: The information contained in this article on 'What does home owners insurance cover' is a collection of contributions by licensed mortgage professionals and is not the opinion of Broker Outpost LLC. Always consult a licensed professional before applying for a mortgage.