What You Need To Know About Homeowner's Insurance

A lender will not sign-off on your mortgage loan unless you have secured adequate homeowner's insurance. The policy protects your financial interests and the lender’s investment in your home. Don’t wait until the last minute to begin shopping for a homeowner's insurance policy. Annual premium costs and coverage options vary widely between insurance companies.

A typical homeowner's insurance policy provides protection for casualty, liability and personal property. Your insurance broker can help you determine how much coverage you need for each of the three standard protections.

Casualty coverage provides protection for common hazards including fire, wind, lightning or other incidents that can cause structural damage to your home. If the house is damaged or destroyed by a covered peril, the casualty insurance should cover the cost to rebuild. Ask your insurance broker about a guaranteed replacement cost provision. The provision ensures that your insurance will cover the cost of rebuilding your home even if the cost exceeds your policy limits.

Homeowners can be subject to a host of legal liability issues. The liability coverage provision in a homeowner's policy provides protection against lawsuits that can result if a guest or some other visitor is injured while on the property. One rule to consider is that your liability limits should total at least twice the property’s value.

Personal property coverage protects the contents in your home. The limits and terms of this coverage can vary widely. For example, a replacement cost provision can provide reimbursement for your possessions based on today’s market value. Conversely, the coverage may value your possessions based on what they were worth when initially purchased minus depreciation. In the event that you file a personal property claim, it’s a good idea to have a detailed catalog of your possessions. The easiest way to document and itemize your personal property is to go from room to room with a video recorder and methodically record your home’s contents.


  • Are You Ready to Own a Home?
  • Home Buyer's Step By Step Guide
  • Evaluating Neighborhoods
  • Home Buyer Remorse
  • The Home Inspection
  • The Final Walk Through
  • What You Need to Know about Homeowner's Insurance
  • Home Ownership Pays
  • ThAT Perfect Home: Must-Haves and Wish List
  • The Purchase Offer
  • Why You Should Hire a Realtor:Buyer Benefits
  • Ship-Shape Credit: Keeping Your Finances in Shape
  • It's a Buyers' Market for Investors too
  • Financing Articles Links

  • How Much Home Can You Afford
  • Mortgage Basics
  • Adjustable Rate Mortgages
  • Bridge Loans
  • Capital Gains Tax
  • How Your Credit Score Affects Your Buying Power
  • Debt to Income Ratio
  • FHA Loan
  • Fixed Rate Mortgage
  • Good Faith Estimate (GFE)
  • PMI- Private Mortgage Insurance
  • A Pre-approved Buyer is a Serious Buyer
  • Shopping for Interest Rates
  • The Stated Income/Stated Asset LoaN