Homeowners Insurance Coverages Explained

The luxury of owning a house is a blessing, but that isn’t enough. It needs financial protection in unforeseen circumstances. And for this, homeowner’s insurance is the answer.

Having your own house is a blessing. Generations are brought up in one house that serves as a constant for families, the house you live in deserves some protection.

What if that house you love so much was caught up in a fire, and all your valuables and memories went up in flames? Or in case of a burglary, everything you’ve collected from your savings was gone in the blink of an eye?

It would take years and years of savings to revive all those things again and those too at the expense of earning day and night. What if the house had some protection and were free of the financial burden of a mishap or an emergency?

Insurance companies give such financial protection under the homeowner’s insurance policy.

Let’s see what it is, what is covered, and how it works.

Homeowner’s Insurance Definition

Homeowner’s insurance generally covers the interior and exterior of a house. In the case of destruction or theft, the insurance policy covers the cost of possessions lost or damaged, personal liability, and the repair cost of the house’s exterior like roof or drainage.

Different coverage options determine the policy’s overall cost and the monthly premiums that are to be paid. Of course, regular payment of premiums is essential to keep the policy in force and to ensure coverage of the house.

Homeowners Insurance Coverages Explained

There are different coverage options that policyholders can choose from, depending on their requirements and the ability to afford premiums.

Generally, a homeowner’s insurance covers:

Loss of personal belongings: Whatever is damaged in the house or lost due to incidents beyond control, will be covered by the policy. Make sure to keep a list of all items and cash receipts, so it is easier for you to claim.

For instance, you’re out on vacation, and you come home to see that your house was broken into. Several of your possessions were stolen like TV, laptops, cameras, jewelry, etc. The cost of reviving all those items will be covered in the policy.

Liability to other people: If someone is injured because of your negligence or on your property, you will have to pay for their medical expenses. The insurance company will pay any unintentional damage that you cause to other people or their property.

For instance, your dog gets loose and runs around the neighborhood biting a child. The parents will make you pay for the medical treatments of the child.

There are a couple of other coverage options such as:

Coverage Type What it does Typical Amount
Dwelling Covers damage to the home and attached structures, such as a porch. Enough to rebuild your home.
Other structures Covers stand-alone structures on your property, such as a fence or shed. 10% of dwelling coverage.
Personal property Pays to repair or replace belongings that are stolen or damaged in a covered event. 50% to 70% of dwelling coverage.
Additional living expenses Helps pay temporary living expenses while your home is being repaired. 20% of dwelling coverage.
Medical payments Pays to treat someone injured on your property, regardless of who’s at fault. Also pays if you, a family member or a pet injures someone elsewhere. $1,000 to $5,000.

Homeowners Insurance Rates

Geography plays an essential role while deciding the rates of homeowner’s insurance. The rates vary from every State in the country; find out what rate of insurance you will have to pay based on your location.

State Average Annual Premium
Alabama $1,116
Alaska $1,002
Arizona $966
Arkansas $1,091
California $966
Colorado $994
Connecticut $1,058
Delaware $1,172
District of Columbia $1,047
Florida $1,117
Georgia $1,137
Hawaii $977
Idaho $966
Illinois $924
Indiana $906
Iowa $918
Kansas $908
Kentucky $1,106
Louisiana $1,108
Maine $989
Maryland $1,212
Massachusetts $1,031
Michigan $919
Minnesota $951
Mississippi $1,099
Missouri $897
Montana $948
Nebraska $907
Nevada $933
New Hampshire $1,049
New Jersey $1,052
New Mexico $949
New York $952
North Carolina $1,118
North Dakota $906
Ohio $895
Oklahoma $1,114
Oregon $950
Pennsylvania $1,003
Rhode Island $982
South Carolina $1,126
South Dakota $898
Tennessee $1,118
Texas $1,140
Utah $1,025
Vermont $1,004
Virginia $1,181
Washington $986
West Virginia $1,101
Wisconsin $903
Wyoming $966

Most Expensive States for Homeowners Insurance

According to the data, these are the home insurance rates with the most expensive States.

State Average Annual Premium
Maryland $1,212
Virginia $1,181
Delaware $1,172
Texas $1,140
Georgia $1,137

Cheapest States for Homeowners Insurance

These are the cheapest States for homeowners insurance.

State Average Annual Premium
Ohio $895
Missouri $897
South Dakota $898
Wisconsin $903
Indiana $906

 

Should you buy Homeowners Insurance?

Homeowners insurance is often a necessity asked to you by mortgage lenders. If they’re giving out a loan to you, they want to know what they’re investing in is protected. So one reason you need to buy insurance is that it is a requirement from your mortgage lender.

If you have a big expensive house that you have invested in, you probably want it to be in its excellent condition for many years. Expensive houses have expensive wear and tear! If you believe in this concept, then you need insurance because you probably won’t be able to afford to pay for theft or liability.

Homeowners insurance is often considered a necessity for most people because an insurance company is paying for emergencies! Just keep paying premiums on time to enjoy the benefits of the policy.

 

Nabeel Ahmad

Nabeel Ahmad

Nabeel Ahmad is the founder and editor-in-chief of Insurance Noon. Apart from Insurance Noon, he is a serial entrepreneur, and has founded multiple successful companies in different industries.

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