Consumer Guide to Home Owners Insurance
There are investment properties, bank-owned properties, and people who both live and own their house, but regardless of the circumstances, everybody needs home owners insurance. Whether it's to protect your financial asset, to guarantee you have a roof over your head, or to satisfy the requirements of your lending institution, home owners insurance is a key component of owning any residential property. Unfortunately, not everybody realizes just how much risk they leave themselves exposed to by foregoing this policy, and unlike a driver's license, you may not need to maintain an active policy to comply with state laws. This leaves thousands of people living on a dangerous edge in which the next natural disaster or unforeseen damage threatens to take away their house.
Understanding Perils and Damages
Before you buy a home owners insurance policy, you should take some time to familiarize with the perils that are commonly covered through home owners insurance and which can endanger virtually any residential dwelling. Some of these perils include theft, fire, vandalism, smoke, falling objects, explosions, among many, many others. Needless to say, some of these perils are more common than others. Although your policy may list aircraft damage right alongside hail damage, there are exponentially more claims made for hail than a plane crash. As such, you can't expect to pick and choose those perils that you can anticipate as legitimate threats. For the most part, home owners insurance is a package deal, though some packages have more robust coverage than others.
But before we get to these different policies and the coverage they provide, it's important to understand the difference between the value of your home and the cost to replace it. Most policies will only cover what your house is worth on the free market, not the cost to rebuild it to spec. And with a historically bad housing market, this gap may be wider than ever and ultimately insufficient to protect you from financial calamity. Before you buy a policy, be sure you understand what will happen in the event that your house is completely destroyed.
Different Types of Policies
- Named-Perils Policies: These policies only provide financial protection for specifically enumerated perils. Generally speaking, named-perils policies leave significant coverage gaps in protecting your residential dwelling and its contents. But many people simply can't afford the more comprehensive, all-risk policies. This allows them to purchase some form of protection within their budgetary constraints.
- All-Risk Policies: You've probably guessed it already. These policies cover anything not explicitly excluded in the policy. But read the fine print carefully because "all-risk" policies rarely eliminate all the risks associated with owning a house. Floods and earthquakes, two of the more common total-loss perils, are often excluded from coverage and must be obtained through a separate rider. Likewise, some policies will carry "all-risk" coverage for both the house and its contents, while others relegate the protection for your belongings back to "named-perils" status.
- Specialized Policies: Some property owners require policies written for particular categories of residential dwellings. You can buy a policy for a condo, mobile home, or a house of historical or architectural significance. There are also policies available to protect renters' possessions and valuables.
Find Affordable Home Owners Insurance Online
It takes but a minute to submit a request with NetQuote for home owners insurance quotes. Many people shop for a policy online for the sake of convenience, never realizing the other benefits of our reliable online referral service. Not only can you search from the comfort of your own home, but our service gives the time and the means to directly comparison-shop policies from various companies writing policies in your area. And because our service reduces the overhead costs for these insurers, you're likely to find better premium rates online, regardless of which company or policy type you choose.
See how much you could save today on your home insurance. Get your free home insurance quotes today!