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Home insurance ... Don't leave home without it!   

Home Insurance is designed to provide you with financial protection against any damage and possible risks that your property and possessions within it may face against unforeseen events and circumstances as well as liability for damage and injuries caused to other people.

It is commonly taken to describe both buildings insurance, which insures the fabric of your property, and contents insurance, which covers your belongings.

Home insurance, usually called hazard or homeowners insurance, is too important to not have a full understanding of it.

Although home insurance is not legally required, most mortgage holders require that homeowners purchase insurance before they'll lend them money.

As you can imagine, the cost of home insurance is directly proportionate to the value of your home as well as the coverage that you want to purchase.

Home Insurance Coverage

You will have to search for adequate protection for your valuable belongings and for supplemental coverage for protection against natural catastrophes that are not covered in your basic policy.

And remember, most standard policies, which usually cover disasters such as fire or hurricanes, do not include flood coverage.

If you have insurance, most standard homeowners policies will cover personal possessions for approximately 50% to 70% of amount of coverage you have on the house's structure.

If you want to purchase coverage beyond the maximum dollar amount, you can purchase extended replacement coverage.

When purchasing coverage for the structure of your home, be sure to buy enough to rebuild your home.

Most standard policies provide personal property coverage for 50 percent of the amount of coverage you have on your home, so if you have $100,000 coverage on the structure of your home, your personal property coverage would be $50,000.

A home inventory can help determine the right amount of coverage, help speed up the process of filing for a claim, and will also help at tax time as evidence of lost belongings.

You and your insurance agent should review and update your coverage on a regular basis. Riders (an additional coverage) can be added to the basic policy for an additional premium to cover these events.

There is a special home insurance policy offered for condominium dwellers that includes some liability plus fills the gap between the blanket property coverage and their needs.

Remember, those people that do not have proper coverage are exposing themselves to serious financial loss in the face of such risks as flood/storm damage, fire and other occurrences that threaten our homes and their contents.

Home Insurance Costs

When you purchase a new home, especially for the first time, many states require that your first year's premium for your home insurance is paid in full and it is often simply added into your closing costs.

Costs vary, with basic form being the least expensive and broad form the most.

Estimate how much your house would cost to completely rebuild.

Also, if you work out how much it would cost to replace the contents of your home and the time you've spent on furnishing it, you may then see that contents insurance is a worthy investment.

Make sure your policy covers the cost of rebuilding -- and don't confuse the real estate value of your house with what it would cost to rebuild in case of damage.

Then consider getting a cash-value policy, which will cover the cost of replacing your belongings minus the depreciation, or a replacement-cost policy, which will reimburse you for the full current cost of replacing your possessions.

Of course, the replacement-cost policy will come with a higher price tag.

Consider if you should raise the deductible to reduce costs or comparison shop for less expensive coverage.

The Liability protection and coverage is for added living operating cost when something stops you from living in your home.

As you see, it is foolhardy to own a home and not have home insurance to protect your investment.