Your Homeowners Insurance Guide


A homeowners insurance policy will protect you against certain losses and damages to your new home. Typically this is required by lenders prior to closing to insure your home is protected in case of incurred damages. Depending on the escrow account you have in place your lender might add your homeowners insurance to your monthly mortgage payment.

When choosing your homeowners insurance you will need to keep a few things in mind;

  • What is the monthly cost
  • What is being covered in the policy
  • What is the deductible if any for damages incurred

Unfortunately individuals purchase a homeowners policy without completely understanding what it covers, which is why it is important to speak with a specialist to request specific items you’d like covered and discuss the costs that are included when covering that item. An example of this is that if your home is destroyed in a fire, you’ll receive money to replace the items in the home but only to the maximum amount of your coverage. This would mean that if your coverage is for $150,000 but the items in your home accrued an amount of $180,000, you’d only receive the $150,000 from the insurance company.

Let’s take that same example of the house fire, if you chose to take the money instead of rebuilding the home or replacing those items – the insurance company will then examine the cost of the items minus the depreciation of those items. This process is called Actual Cash Value.

You are able to customize your homeowners insurance to your ideal preferences. Generally, your insurance is purchased to cover liability issues from accidents that happen to other people on your property. This would include covering medical care, court costs, and possibly the award to the other person. 

If you have more questions about this topic please let us know and we’d be happy to get you in touch with a specialist.