Homeowners insurance provides financial security if your home is affected by a disaster or accident. In this blog post, we’ll discuss what homeowners’ insurance covers and what it doesn’t.
WHAT IS HOMEOWNERS INSURANCE?
Homeowners insurance is a type of property insurance that protects a person’s home, belongings, and assets from losses and damages. Each policy has a liability limit that sets the amount of coverage for an unfortunate event. If that happens, it’s your responsibility to report it to the insurance company. They’ll compensate you for covered losses, minus your home insurance deductible, up to the limit specified in your policy.
WHAT IT COVERS
A homeowner’s insurance policy usually covers specific weather-related issues, such as fire, smoke, wind, hail, snow, ice, and lightning. It also protects the structure and its contents from vandalism and theft.
Furthermore, they’re typically “package policies,” which means that they cover not just property damage but also liability – or responsibility – for injuries or property damage caused by anyone in the household, including pets.
WHAT IT DOESN’T COVER
Floods, tsunamis, drain and sewage backups, leaking groundwater, standing water, and other water-related catastrophes are not included. However, you can purchase flood insurance and earthquake insurance separately, depending on where you live. Mold and earthquake damage are usually not covered either. Moreover, most policies exclude extreme situations like nuclear events, wars, and terrorism.
IS HOMEOWNERS INSURANCE REQUIRED?
Homeowners insurance is not a legal requirement like car insurance. However, if you’re financing your home, mortgage lenders typically require it. Even if your mortgage is paid off, your home is a valuable asset worth protecting. Homeowners insurance safeguards your property and provides coverage if someone sues you for accidental injuries, making it something you should consider purchasing.
HOME INSURANCE VS. HOME WARRANTY
A home warranty covers repairs and replacements for home appliances and systems, such as ovens, water heaters, washers, and dryers. Contracts last 12 months but aren’t required to qualify for mortgage loans. Home warranties address maintenance and wear-and-tear problems that homeowners insurance doesn’t.
FAQS ABOUT HOMEOWNERS INSURANCE
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Is home insurance tax deductible?
You can’t deduct homeowners insurance premiums from your taxes unless your property generates income. However, if you rent out a portion of your house or have a home office, your premiums might be deductible. Learn more here, or consult a tax professional for more information.
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How long are homeowners insurance policies valid?
They expire after 12 months but are renewed annually. Find out more about policy durations and homeowner’s insurance payments.
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Is homeowner’s insurance necessary for rental properties?
If you own rental properties with tenants, landlord insurance is essential. This type of insurance protects your property and provides liability coverage, similar to regular home insurance policies. Click here to see more home insurance FAQs.
HOMEOWNERS INSURANCE BOOSTS FINANCIAL SECURITY
Understanding homeowners insurance is crucial to protecting your home and assets. Remember, homeowners insurance boosts your financial security, and while not legally mandated, it’s often required by mortgage lenders.
I’ll be happy to answer any questions you may have about homeowners insurance and help you choose the right policy for your property. I’m Robyn Robinson, your trusted Orange County, CA Realtor. Call 949.295.5676 or send an email.
You can also read this comprehensive first-time homebuyers guide as you search for homes for sale in these communities, and the surrounding areas. Again, call me if you have any questions. Happy house hunting!