Homeowners Insurance 101

Any home is a huge investment. Whether you're building or buying, it's a financial decision you don't take lightly. However, while homeowners spend plenty on a home, many don't understand the importance of protecting their investment.

Though you can legally own a home without homeowners insurance, most lenders require you to have coverage to protect your home in case of damage cause by unforeseen circumstances, such as fires or natural disasters.

Here's what you need to know:

Allstate.com gives a basic idea of the kind of coverage most policies include. These are:

  • Dwelling protection

  • Personal property protection

  • Other structures protection

  • Family liability protection

  • Guest medical protection

  • Additional living expenses

Most policies cover damage by just about everything, unless specifically excluded in the coverage agreement. Your policy will most likely cover you in the event of hail, lightning, and other storm damage, vandalism, theft, fire and smoke. Floods and earthquakes are typically not covered, so if you live in an area prone to these kinds of disasters, you'll need additional coverage.

Finally, your policy will have a deductible amount - if a loss occurs, the deductible is the sum that the you will have to pay before insurance coverage begins. Usually, these are low - around $500-$1000. However, some companies will hold a percentage deductible, which is usually 1-3% of the cost of the home.





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