A home insurance policy is designed to provide you with financial benefits when your home is damaged in some way or when you are facing other potential losses related to the property. Most people first set up a homeowners insurance policy when they purchase a home, and this is because mortgage companies require their accountholders to have insurance coverage on the property at all times. If you fail to maintain coverage, your mortgage company may purchase the policy for you and require you to pay for it. It makes sense to set up your own coverage so that you have control over its features and benefits.
There are multiple coverages included in a typical homeowners insurance policy. Liability insurance is common, and this provides you with benefits if you face a property-related liability issue. For example, if a friend falls down your stairs, liability insurance may pay for their medical bills and related expenses. Property insurance is also usually included in a typical home coverage policy. This type of policy pays for repair work or even a full replacement if the home is damaged. The damage must be caused by events or perils included in the coverage. Many standard property policies do not include flood damage, earthquake damage and other types of coverage, and these must be added onto the policy if you desire or need them. You may also add personal property coverage to your policy. Your home likely holds tens of thousands of dollars’ worth of furniture, jewelry, electronics, clothes, appliances and more. In the event of a fire, theft or other issue, these items may need to be replaced, and personal property coverage provides compensation for the replacement.
Your mortgage company will typically provide you with a list of minimum home insurance coverage requirements that you must comply with, and you can choose to purchase additional coverage as well. In addition to selecting the coverage types and limits for your policy, you can also set a deductible amount that is affordable for you. Remember to update your coverage periodically so that it continues to meet all of your needs in the years to come.