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Frequently Asked Questions

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Illustration of a Homeowners Insurance FAQ

Homeowners Insurance FAQ

What is homeowners insurance?

Homeowners insurance is a form of property insurance that covers the losses and damages done to an individual’s house and the assets within it. It also provides liability coverage against accidents in the home or on the home’s property.

What perils are covered by homeowners insurance?

Most typical homeowners insurance plans cover damage and losses resulting from:

– Fire
– Smoke
– Lightning strikes
– Windstorms
– Hail
– Vandalism
– Explosion
– Theft/Burglary
– Falling objects
– Weight of ice/snow/sleet
– Damage from an aircraft, car, or other vehicle

It is important to check with your insurance provider to make sure that you have the coverage you need.

Why should I get homeowners insurance?

Homeowners insurance helps protect your investment. If a hazard happens inside or outside of your home, it will become your responsibility to make the proper repairs and replacements. Having a homeowners insurance plans will help you pay for repair or rebuilding, pay your mortgage if the home is destroyed and you still have to pay your loan, and offset the cost of potential lawsuit should someone get injured on your property.

Am I required to have homeowners insurance?

Homeowners insurance is not legally required, but you put yourself at a big risk. You will be responsible for any costs for repair or replacement after a hazard, theft, or other unforeseen circumstance.

How much does homeowners insurance cost?

It varies. The value of your property, local crime rate, and what state you live in are just a few of the factors being considered when an insurance company calculates your premium. Because of all of these variables, the annual premium for a standard homeowners insurance plan can range anywhere from $400 to $1,500. If your home is highly valued, it could possibly be more. If you choose to have additional protection, it could also be costly, however you’ll get better protection in exchange.

What perils are excluded from homeowners insurance protection?

There are a few hazards that are not covered by typical homeowners insurance plans. Homeowners insurance plans don’t provide coverage for damage or losses caused by:

– Earthquakes
– Flooding
– Maintenance Issues
– Sinkhole
– Pest infestation
– Sinkholes
– Sewer backup
– Mold
– Pets
– War
– Nuclear hazards
– Government actions
– Rust, corrosion, or decay
– Power failure

Check with your insurance provider to see what is protected under your homeowners insurance policy. You can protect yourself from many of these perils by purchasing additional special coverage.

My insurance provider is asking me to keep an inventory of my home. What does that mean?

Taking an inventory of your possessions can help speed up the claims process should those items be lost, damaged, or stolen. Taking photos of your possessions, logging your items and how much that they cost, along with keeping receipts will be incredibly helpful to help prove ownership of your possessions along with their worth.

Does homeowners insurance cover items stolen from my car?

Yes. Items stolen from inside of your vehicle are typically covered by most homeowners insurance plans, regardless of whether or not your car is parked at your home or elsewhere.

My boat or car was stolen from my garage. Will my homeowners insurance plan cover that?

No. While items stolen within those vehicles are subject to coverage by your homeowners insurance plan, the theft of the actual car/boat would have to be covered by an auto insurance or watercraft insurance plan.

I have an expensive antique or high-valued item in my home. Will my homeowners insurance plan cover the entire value of the item if it has been lost or stolen?

Depending on the item’s value, a standard homeowners insurance policy might not be able to completely cover the item’s loss. For high-value items such as antiques or jewelry, it is recommended to have the item professionally appraised and have a separate insurance policy to ensure that its loss will be fully covered.

A tree from my neighbor’s yard fell on my roof during a windstorm. Does my homeowners policy pay for the damage or does my neighbor’s homeowners policy cover me?

In most cases, your homeowners policy will cover the damage. However, your insurance provider may recover the amount it pays you and your deductible from your neighbor’s homeowners insurance provider if the incident was a result of your neighbor’s negligence.

Does homeowners insurance cover water damage?

Sort of. If a broken pipe or other accidental discharge of water from a plumbing or heating system occurs, your homeowner’s insurance should cover the damages and loss. However, it will not cover incidents as a result of negligence such as backups of drains or backups from your sump pump.

Does homeowners insurance cover flooding?

No. This is a common misconception. Most homeowners insurance plans generally do not cover flooding unless it is directly stated on your policy. It doesn’t matter whether the flooding is the result of natural causes such as a local river overflowing or man-made hazards such as the backup of sewer drains in your basement. You can get flood protection in a separate policy, if needed. Some flood-prone states such as Florida may require you to purchase protection against flooding.

Is homeowners insurance tax deductible?

In most cases, no. While you do get certain tax benefits as a homeowner, those are unrelated to homeowners insurance. However, if you use part of your home for business purposes, you might be able to deduct a portion of your homeowners insurance. Talk to your tax advisor to determine whether or not you can list your homeowner insurance as a business expense.

When and how can an insurance company cancel my homeowners insurance coverage during the policy’s term?

There are certain circumstances which insurers can cancel a homeowners policy. Your insurance plan can be cancelled for the following reasons:

– Material misrepresentation
– Fraud
– Nonpayment of a premium
– Physical changes in the property that render the property uninsurable (Example: Leaving the home vacant for 60 consecutive days increases the exposure and risk of vandalism)
– Conviction of a crime stemming from acts that increased risks of covered acts (Example: Getting convicted for illegal storage of fireworks which increases the risk of a fire hazard)
– Activities or omissions that increase the risk of a hazard (Example: Not getting a gas leak fixed)
– A determination by the Commissioner of Insurance that continuation of the policy places the insurer in violation of the law