Home Insurance Buying Guide

By Frank Topol

Any consumer with a mortgage is most likely required to maintain home insurance that will protect both the homeowner and the lender in the event of any major catastrophe. However, many required policies don't have an adequate level of protection for unfortunate occurrences such as theft or loss. It is important for homeowners to understand what it is that their homeowners insurance actually covers, and only then can the appropriate decisions about levels of coverage be made.

Home insurance is designed to cover the structure of the home and will help repair or rebuild after a fire, hurricane, tornado, or other disaster. Detached garages and other buildings normally must be specifically listed on the policy, but they can be included as well.

In the event that a family is displaced from their home, there are provisions within a homeowners insurance policy that will provide living expense money to help until they can move back to their house. Food and rent are often included in such provisions, but the amounts vary per policy.

Personal belongings are also covered by home insurance to the extent of the value claimed by the homeowner. Therefore, it is imperative that a consumer make a home inventory and list all belongings and their associated value. In addition to providing coverage during disasters, the home insurance will also pay to replace these items if they are stolen or otherwise damaged.

The most important thing from a financial standpoint that home insurance protects against is liability. Any time a neighbour, worker, or stranger is on an individual's property, the potential for liability is present. One single lawsuit could be enough to permanently destroy the financial stability of a family. Home insurance will even pay for court costs and an attorney in the event that any situation does occur.

Homeowners insurance is mandatory in most cases, but should always be maintained no matter what the circumstances are. There are plenty of ways to cut the costs without decreasing the amount of protection. Deductibles can often be raised to lower the premium. Discounts are commonly available for safety and security items such as dead-bolts, alarm systems, and sprinklers. Other discounts may be given to consumers that also have their auto insurance with the same insurer. Of all the ways to save, the most effective is shopping around and comparing multiple quotes online. The protection is absolutely necessary, but there is no harm in receiving the best possible price for home insurance.