HOMEOWNERS Insurance Policy
Making sure a person's residence is covered by a homeowners insurance policy is a crucial step toward protecting his or her financial situation and investment. Home insurance protects the owner of a residential dwelling from property loss as well as liability for accidents occurring on the property.
Anyone who owns a residence, whether or not it is a primary residence or second home, should secure protection against loss due to occurrences such as fire or theft. The cost of such a policy varies widely based on the value of the home and the property held within it. Policies can be customized based on the estimation of the replacement cost of the home and property.
Since the insurance company will only pay out the exact amount listed on the policy, it is important to keep an up-to-date listing of the contents of the home. For example, if a home is worth $200k but there is jewelry and other valuables onsite worth an additional $100k, one must notify the insurance carrier to make sure the policy covers the high value of personal property.
It is also important to know exactly what is covered by the acquired policy. A typical policy covers liability in case a person is injured onsite, but it does not automatically cover damage from flooding or termites. One must purchase additional insurance to cover such situations.
If someone owns a home free and clear, without a lien or mortgage, then the insurance policy is optional. However, a mortgage company that has first rights to the title of the property will require home insurance to protect its investment.
Regardless of each specific situation, securing a homeowners insurance policy is a wise decision, to protect what is likely ones largest financial investment.