Most lenders require homebuyers to carry homeowner's insurance. This is a hazard insurance policy designed to cover your property against peril.
Most homebuyers elect to take out a comprehensive homeowner's insurance policy. This type of coverage covers the cost of rebuilding your home, your possessions, liability, vandalism, theft, water damage (not flood related) and loss of use. There are three basic areas this type of insurance is designed to cover.
Casualty: If your home should be damaged or destroyed (most frequently due to fire), your insurance will cover the cost of rebuilding your home. This is usually based on the square footage of your dwelling space (which can be found on the appraisal report). It is important to note that your coverage amount is not based on the amount you paid for the home, or the amount of your mortgage.
Keep in mind that your insurance policy likely doesn't cover rising water (flood) or earth movement (earthquake). Separate insurance policies can be purchased to cover these occurrences.
Personal Property: Your insurance policy also will likely cover up to a specific amount towards the replacement of your personal belongings in your home, similar to renter's insurance. It is important to ask your insurance agent which items may not be covered under this portion of your insurance. In most cases, a separate policy can be purchased to cover any items not falling under the purview of this portion of your coverage. One example may be an expensive item of jewelry.
Liability: As a property owner, you are liable for any accidents which may occur on your property. If a guest or passerby slips on a patch of ice on your front porch or falls off your staircase, you are liable for their injuries. This is also covered under your homeowner's insurance.
Remember to compare insurance rates. Ask your insurance agent any questions you may have regarding coverage and loss, limitations, deductibles and the like. Most companies also offer discounted rates if you have both your vehicle and home insured. If you need assistance in finding an insurance agent, please feel free to contact me.