Your home is so much more than just a roof over your head—it’s the place where you’ll create memories for a lifetime. Chances are, it’s also your most valuable asset. That’s why homeowner’s insurance coverage is crucial for protecting your investment in the face of disaster.
Ready to find affordable home insurance that you can rely on? We’re here to help you do just that. Stay with us as we cover the basics of homeowners insurance coverage, from what it covers to how much it costs.
Homeowners insurance, also known as home insurance, helps provide financial protection if an event covered under your policy—such as fire or theft—damages or destroys your home or personal items. Homeowners insurance consists of three main purposes:
In some cases you can get additional policies for events not covered by your regular home insurance, such as flooding. Homeowners insurance coverage isn’t required by law, but if you have a mortgage, your lender will likely require you to insure the home to protect its investment. You don’t even have to own your home to need insurance, as many landlords require their tenants to maintain renter’s insurance coverage. Even if you don’t have a mortgage, home insurance is always a wise investment, since it gives you both property and liability coverage.
The cost you should expect to pay for homeowners insurance will depend on a number of factors, from coverage type to the features of your home and the value of your personal belongings. There may also be extra costs for additional coverage or increased coverage limits.
However, the average American pays $1,631 for home insurance each year, with an average monthly rate of $136. But home insurance rates are also largely determined by where you live. For example, Hawaii and Delaware paid the lowest annual rates, at $483 and $747 respectively. Meanwhile, Kansas and Oklahoma paid the highest home insurance rates, at an average of $3,644 and $3,548 per year.
Most insurers will consider the following in order to determine your insurance rate:
Standard homeowners insurance policies typically include six distinct types of coverage:
You may also be able to purchase additional coverages for greater protection. For example, most homeowners insurance policies offer coverage for damage caused by fires, lightning strikes, windstorms and hail. But not all natural disasters—such as floods or earthquakes—are covered by homeowners insurance. By purchasing additional coverage, you’ll be able to help protect your home and belongings against those types of risks.
Not all home insurance coverage is created equal. Some types provide more expansive coverage than others, so it’s worthwhile to know the difference. Homeowners insurance in the US comes in several types, called “policy forms.” They are designated HO-1 through HO-8 and offer various levels of protection depending on the needs of the homeowner and the type of residence being covered. There are essentially three levels of coverage.
So which level of coverage will you need? It’s always a good idea to get coverage for more than your home is worth, as long as it’s financially feasible for you to do so. Ideally, every homeowner would have enough insurance to cover not just the value of the home, but enough to rebuild it at current industry prices. In this case, a guaranteed replacement value policy would cover the increased replacement costs and give a financial cushion if construction prices increase.
We know how overwhelming it can feel when you’re shopping for home insurance. And that’s why we’re here to make the hunt for home insurance coverage easier than ever. We offer the best possible coverage rates to help you and your family stay safe and healthy—while also saving money for your future. Get your free online insurance quote and rest easy knowing that if disaster strikes, your home is protected.