About Homeowner Insurance

Homeowners insurance is a type of insurance that protects individual owners of private homes. Coverage varies by policy, but generally includes both the structure and contents of the home in the event of an unforeseen circumstance such as fire or theft.

Scope

Generally, homeowners insurance provides financial coverage for the building and possessions in your home as well as lawsuits that may arise from accidents on your property. Burst pipes and water damage caused by a faulty water heater are also typically included in a standard homeowners insurance policy. Extended insurance coverage can be obtained to provide additional protection against damage resulting from flooding, hurricanes and earthquakes. Not everything is covered under a standard homeowners insurance policy, so it's important to carefully discuss your specific policy with your insurance agent.

Types

There are three main types of homeowners insurance: building coverage, personal property coverage and liability coverage. As its name suggests, building coverage protects all of the structures of the home, which includes the foundation, roof, walls, doors and windows. Personal property coverage provides replacement or reimbursement of damaged personal goods such as furniture and electronics. Liability coverage applies to claims against you for negligence and covers legal costs involved in a third party litigation claim.

Significance

Besides the financial protection, homeowners insurance provided the homeowner with peace of mind. A comprehensive homeowners insurance policy takes the worry about what would happen if you have a leaky roof or a damaged basement due to a water heater leak. Moreover, homeowners insurance can provide you with a place to stay should your home be unfit to live due to extensive damage.