If you own a home, financial professionals agree you need insurance to protect your home and personal property. And if your home is financed with a mortgage, lenders will require you to have homeowners insurance. So let’s look at homeowners insurance basics!
What homeowners insurance often covers
Read your policy carefully to understand what’s covered and how much claims will pay. Work with your agent to make sure you have enough coverage to repair or replace your home and personal property, and review your policy periodically to make sure you have the protection you need. Most homeowners insurance policies cover:
- Your home is usually covered for damage from fire, theft, accidents, and weather events like wind, rain, snow, freezing temperatures, and lightning. You are often protected from damage caused by failures of your plumbing, electrical, and heating and cooling systems, too.
Other structures on your property
- Policies typically cover additional structures on your property such as detached garages, fences, and sheds.
Your personal property
- Furniture, clothing, and appliances are typically covered by homeowners insurance. Diamonds, furs, expensive electronics, and other costly items may not be insured for their full value without special coverage.
- Liability protects against claims should someone have an accident or become injured on your property. Liability protection may cover damages outside the home (such as accidental damage to a hotel while traveling).
Additional living expenses
- Some policies pay for lodging if you are unable to live in your home after an accident covered by the policy.
What homeowners insurance might not cover
Some accidents and events are not covered. Again, check your policy but often the following aren’t included:
- Standard policies do not protect your home from flood damage. You will need flood insurance. According to the Federal Emergency Management Agency (FEMA), more than 20% of flood claims come from outside high risk zones.
- Home insurance policies usually won’t cover earthquake damage. Many insurers, including the state of California, offer separate policies.
Mold & termites
- Mold may be covered when it is the result of an event covered by the policy. Damage caused by termites and other pests is generally not covered.
- Policies generally do not protect you from damage resulting from normal wear and tear or neglecting maintenance. For example, if you are aware your roof is leaking and do not take reasonable steps to repair it, damage that results may not be covered.
Do you have enough insurance coverage?
Another consideration is the amount of coverage your policy offers. Homeowners insurance policies often have two basic options: cash value and replacement cost. Cash value pays to replace your home or property after a deduction for depreciation. Replacement cost pays to replace these without a deduction for depreciation.
Also check your personal property coverage. This is often between 50% and 70% of the amount of insurance on the structure of your home, and may not be sufficient to cover your personal possessions. Property like jewelry and expensive electronics may have limits on coverage in standard policies.
Get a quote on homeowners insurance from Matic
To help you save money on homeowners insurance, Freedom Mortgage has partnered with Matic Insurance. See how much you can save with a FREE quote from Matic Insurance.
Insurance products are offered through FMC Subsidiary Services, LLC, an affiliate of Freedom Mortgage Corporation (collectively “Freedom Mortgage”), and administered by Matic Insurance Services, Inc. Freedom Mortgage may be compensated in connection with these programs. The purchase of insurance or other similar products from a particular insurance provider is not a condition of, and will not affect the terms of or a decision relating to, any loan or extension of credit by Freedom Mortgage. Homeowner accepts and assumes full responsibility for the evaluation, selection and suitability of insurance or other similar products. Neither Freedom Mortgage nor any of its affiliates underwrite any policy of insurance. Insurance products may not be available in all states.