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What is Homeowners Insurance?

Posted on February 2nd, 2018

Homeowners insurance is a package policy. This means that it covers both a) damage to your property and b) your liability or legal responsibility with regard to any injuries and property damage you or members of your family cause to other people. This also includes damage caused by household pets.

Under homeowners insurance, damages incurred for a wide variety of calamities are covered, however there certainly are exceptions. The most significant of these exceptions are damages caused by floods, earthquakes and inadequate maintenance. You must purchase two separate plans for flood and earthquake coverage. Maintenance-related problems are the property owners' responsibility.

In the United States, the majority of home buyers borrow money in the form of a mortgage, and the mortgage loan provider often mandates that the customer purchases homeowner's insurance as a condition of the loan, so as to protect the bank in case the home is destroyed. Anybody with an insurable interest in the property must be listed on the policy. In some cases the mortgagee will waive the requirement for the mortgagor to carry homeowner's insurance if the value of the land exceeds the amount of the mortgage balance. In such a situation even the total destruction of any buildings would not influence the ability of the lender to be able to foreclose and recover the full amount of the loan.

Home insurance in the United States may differ from other countries; for example, in Britain, subsidence and subsequent foundation failure is usually covered under an insurance policy. United States insurance companies used to provide foundation insurance coverage, which was then reduced to coverage for damage due to leaks, and eventually eliminated altogether. Insurance policies are often misinterpreted by their purchasers; for example, many believe that mold is covered even though it is not a standard coverage.

In conclusion, homeowners insurance is an important part of any customer's financial plan. Just like all insurance you hope you never have to use it, but also make sure you have the proper protection, giving you peace of mind when you sleep at night.



Mary Beall Neighbor


(925) 210 1345

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