Homeowners Insurance Guide

Homeowners insurance is something that every homeowner should have. It is there to protect you in case something happens to your home. It can give you the peace of mind that you are covered in case of a disaster. A homeowners insurance policy can make you whole again if properly covered.


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What is Homeowners Insurance?

Homeowners Insurance is insurance that homeowners purchase to protect themselves from losses arising from perils such as fire, theft, and weather-related damage that would affect their home and personal property. Home Insurance also covers liability claims arising from accidents on the property due to a covered loss. One big thing to know is that homeowners insurance only covers the structure and not the land it sits on.

What Does Homeowners Insurance Cover?

A standard HO-3 homeowners insurance policy typically covers the following:

  1. Your Dwelling/House – the home structure including attached structures a deck or garage.
  2. Other Structures – detached structures on your property like a gazebo or swingset.
  3. Your Personal Property – like clothing, furniture, and other personal property.
  4. Liability – coverage for being sued for accidents on your property.
  5. Loss of Use – If your home becomes uninhabitable due to a covered loss, they will help pay for an apartment, food, clothing, all while your home is being repaired.
  6. Medical Payments – for people who are injured on your property, up to a certain limit

What Does Homeowners Insurance NOT Cover?

Every state and insurance company can differ on this but below is a list of commonly excluded items from homeowners insurance policies:

  1. Flood coverage – is generally excluded from a standard homeowners insurance policy but can be purchased as a separate policy.
  2. Earthquake coverage – is generally excluded from a standard homeowners insurance policy but usually can be added (endorsed) to your policy for an additional fee.
  3. General wear and tear – are excluded from a homeowners insurance policy.
  4. War – is not included as a covered peril in most homeowners insurance policies.
  5. Neglect – is not usually a covered peril on a home insurance policy.
  6. Intentional loss – is not covered if you premeditate damage.

What coverages are available?

The coverages available can differ from insurance company to insurance company but below is a list of standard coverages as well as some optional ones that you can ask your insurance carrier if they offer under their products:

  1. Dwelling Coverage – a determined limit of insurance coverage for the physical dwelling and attached structures. For your primary residence you will want replacement cost on your home to make sure it is put back together exactly the way it was prior the the loss.
  2. Other Structures Coverage – usually a percentage limit of the dwelling amount to cover any structures not attached to your home.
  3. Personal Property Coverage – a limit of coverage that will replace your personal belongings like clothing and furniture.
  4. Personal Liability Coverage – a limit of liability coverage that will protect your finances from accidents and claims made against you and your property. Financial protection can be just as important as the coverage protecting your dwelling.
  5. Loss of Use – coverage that will assist you if your home ever needs to be repaired and you are unable to live in the home while it is being fixed.
  6. Medical Payments – coverage if someone is hurt on your property and needs monetary assistance to pay for their medical bills.

What are the different types of homeowners insurance policies?

There are many types of home insurance and insurance agents will be the best to determine which type of home insurance is best for your scenario.

  1. HO-1 – This home insurance type offers the least amount of coverage and is very rarely written. It will cover basic perils like fire and lightning but will not cover against things like falling objects and water damage.
  2. HO-2 – This type of homeowners insurance covers everything an HO-1 covers but adds falling objects and water damage as listed covered perils. Anything not listed as a covered peril is excluded from the policy. This type also has personal property coverage for your belongings in the home.
  3. HO-3 – This is the most standard type of homeowners insurance policy. It will cover most perils other than what is specifically excluded from the policy. Personal belongings are covered under an HO-3 as well as other structures on your property.
  4. HO-5 – This is a broader form of home insurance coverage. It is much more expensive and rarely used as the HE-7 provides a greater amount of flexibility in coverages at a better value.
  5. HE-7 – HE-7 is an enhanced HO-3 policy with additional coverage limits and possibly guaranteed replacement cost to repair or rebuild your home.
  6. HO-8 – an HO-8 policy was created for older homes where the replacement value would exceed the actual cash value of the home. A good example of this is historical properties needing to be insured that were built in the 1800s.

How to get Homeowners insurance?

The first and best way is to get a homeowners insurance quote through an agent. This is almost always the least expensive and safest option since you are having a professional find all available discounts as well as making sure you are protected adequately.

Your insurance agent will ask you questions to help determine which insurance company and coverages are best for you. Also, an agent in most cases is paid by the insurance company and not by you the consumer giving advice free to you and your family. You can request a quote from an agent at the top of this page!

How much does Homeowners Insurance cost?

The easiest way to find out the cost is to get a homeowners insurance quote yourself on your property! This figure can vary greatly depending on your insurance credit score, zip code, size of the home, and the coverage you need. You would be surprised how location and zip code can play a large part in how much your insurance can cost. A homeowners insurance quote will show you all of the coverages the agent can offer.

How to lower your Homeowners Insurance rates?

Below is a list of steps that you can take to lower your home insurance rates:

  1. Raise your insurance deductible.
  2. Ask your agent about available discounts for you.
  3. Add a home security system to your home.
  4. Shopping around for insurance companies rates.
  5. Check your coverage options.

What insurance discounts are available for Homeowners Insurance?

Below is a list of discounts you can receive depending on what the insurance companies offer so always make sure to ask your agent about available discounts.

  1. Multi-Policy – the multi-policy discount is usually one of the largest discounts you can receive. By bundling your home, auto insurance, umbrella, RV, motorcycle, and other policies can save you money.
  2. Advance Quote – getting a quote ahead of time the actual date you would like it to start can save you money.
  3. Claims Free – Not filing claims can save you money on home insurance policies.
  4. Alarm System Discount – adding an alarm system may protect your home from theft but almost always will get a discount on your home insurance policy.
  5. Paid in Full Discount– If you pay your policy premium in full you can receive a discount.
  6. Reoccurring Payments – if you pay your premium by automatic drafts it can save you money on your home insurance.
  7. Insurance Credit Score– Having a good insurance credit score can discount your insurance premium.
  8. Package Discount– ask your agent about package discounts by bundling coverages.

How to Cancel Homeowners Insurance?

  1. Cancel with your insurance agent. Having an agent makes it very easy to cancel your insurance policies. They usually have a streamlined process for this and make it extremely simple. By having that direct contact info for the person that handles your policy gives you less chance of mistakes being made.
  2. Cancel Online. You sometimes can cancel through an online account of your insurance company.
  3. Cancel by calling your insurance company. Usually by a 1-800 #.

How to Switch your Homeowners Insurance policy?

Below are the steps to switching your Homeowners insurance from one insurance company to another.

  1. Pull out your current insurance coverage documents to be prepared to compare the coverages you get from the quotes you receive.
  2. Get a Home Insurance Quote from a licensed agent for FREE- *Click Here*
  3. Compare the home insurance quote with your current coverages and premium.
  4. Choose the quote that fits you best. Don’t always just base it off premium.
  5. Pay the premium to the new insurance company you choose.
  6. Sign the new insurance company policy application.
  7. Cancel your current insurance policy on the effective date of the new one.

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How long does it take to get Homeowners Insurance?

This will mostly depend on you. If you wanted to time it out to see how fast you can get insurance, you could probably get a policy in around 20 minutes. But, we recommend taking your time with this decision to compare homeowners insurance policies.

We recommend getting multiple quotes then taking the time to compare home insurance companies as this could save you money on your home insurance. I would also make sure to review your concerns with your agent to discuss all of the coverages and discounts available to you.

How can you pay for your homeowners insurance?

It is best to check with the insurance companies on the ways they accept payment but below is a list that different insurance companies offer:

  1. Mortgagee Escrow Billed – When you got the loan for your home, most times the mortgage lender will set up an escrow account to pay for your homeowners insurance that you will pay every month out of your escrow account just like you do your property taxes.
  2. Annually – you can pay your home insurance premium for the entire year.
  3. Semi-Annually – you can pay your home insurance premium twice a year.
  4. Quarterly – you can pay your home insurance premium 4 times a year.
  5. Monthly – you can pay your home insurance premium 12 times a year.

What happens if you do not have Homeowners Insurance?

If you do not have homeowners insurance and a natural disaster, theft, or fire happens, your uninsured losses could be in the thousands of dollars.

In some cases, if you are sued because someone was injured on your property and you did not have homeowners insurance, the damages awarded to that person could come out of your pocket.

in other words, if you do not have homeowners insurance, you are putting your home and finances at serious risk.

Is Homeowners Insurance mandatory?

Homeowners insurance is only mandatory if you have a home loan with a bank that requires it to protect them in the event of a loss. After you have paid off your home loan, you will not be required to carry home insurance anymore.

Because your home usually is one of a family’s largest assets so whether you have a home loan or not, it is always best to carry homeowners insurance coverage.

How to file a claim on a homeowners insurance policy?

The first step is to contact your homeowner’s insurance agent or company to let them know that you will be filing a claim.

Your homeowner’s insurance company will assign an adjuster who will contact you to schedule an appointment to inspect the damages.

It is important to take pictures of any damages before the adjuster comes out so that you have documentation.

The adjuster will inspect the damages and determine how much it will cost to repair or replace what was damaged.

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