Your home is likely the biggest investment you will make in your lifetime, making it essential to protect your home with the proper home insurance coverage. Home insurance, also commonly called hazard insurance or homeowners insurance, is the type of property insurance that covers private homes. It is an insurance policy that combines various personal insurance protections, which can include losses occurring to one's home, its contents, loss of its use (additional living expenses), or loss of other personal possessions of the homeowner, as well as liability insurance for accidents that may happen at the home. It requires that at least one of the named insured occupies the home. Your home insurance must be updated to the present and existing value at whatever inflation up or down, and an appraisal will typically be made by the insurance company.
Your home insurance policy is usually a term contract — a contract that is in effect for a fixed period of time. The payment the insured makes to the insurer is called the premium. The insured must pay the insurer the premium each term. Most insurers charge a lower premium if it appears less likely the home will be damaged or destroyed: for example, if the house is situated next to a fire station, if the house is equipped with fire sprinklers and fire alarms. Most home buyers borrow money in the form of a mortgage, and the mortgage lender always requires that the buyer purchase homeowners insurance as a condition of the loan, in order to protect the bank if the home were to be destroyed.
If you have questions about your home insurance policy, or just want to check your rates, contact Insurance Advisors, Inc. today!
