Homeowners Insurance - Frequently Asked Questions And Answers

If you’re a homeowner who is considering purchasing homeowners insurance, there are many questions that you may have. Read on to learn some of the most commonly asked questions, and answers about homeowners insurance!

Do I need to purchase insurance if I am just renting out my home? 

If you’re renting your home out, then it is not necessary for the renter to purchase rental or tenant insurance. 

What types of plans are available? 

Every individual policy like car or life will be different because they have different levels of coverage. The three main types of homeowners insurance are:

There are also different features and deductibles that you can purchase in your policy if you choose:

Is there a maximum payout that I will receive for each incident? 

Some policies will only pay up to a specific amount, but others have no limit. Policies that have no limit will reimburse you for the full amount of what your home is worth. Learn about the different types of coverage to find the one that works best for you.

Will my policy cover flooding? 

Each policy has different wording, but most do cover some flooding. However, some flooding may not be included if it is caused by sewage backups, or excessive rainwater causes damage to your home.

What is a typical deductible? 

The deductible is the amount of money that you will have to pay in the event of a claim. A typical deductible for homeowners insurance is $1,000 to $2,500. However, some policies do have deductibles that are much higher. There may be discounts available for having a higher deductible depending on your policy type.

What kinds of losses are covered by my policy? 

The coverage varies between different policies, but generally it will cover losses for:

Has my policy expired? 

Homeowners policies expire over time. It’s recommended to review your policy when the time comes to renew.

How can I find a policy that is right for me? 

With all the different types of policies available, and different levels of coverage, finding exactly what you need may be difficult. Having coverage can help ensure that you have enough money to cover your repairs. And don’t forget that there are discounts available based on your policy type as well.

What is the difference between a deed of trust and a mortgage insurance policy? 

A mortgage insurance policy is designed to protect the lender in the event you default on your loan. A deed of trust works in a similar way, but when taking out a loan, there’s usually no requirement for one.

What is title insurance? 

Title insurance protects the legal interests of a property owner when buying a home. Every state has different laws governing the rights of the title holder, but it can protect an owner if there is an issue. It can also protect a buyer or investor from unknown liens against the property when trying to sell later on.

What is builder’s risk coverage? 

Builder’s risk coverage covers losses that occur during various stages of constructing your home. This includes protecting you if you are sued due to an accident during construction, or if your structure becomes damaged before it is completed.

What is Flood insurance? 

Flood insurance is different from most other types of insurance because it covers water damage that can occur in your home after a natural disaster. In many cases, it's only available to individuals who live in certain areas where floods are a common occurrence.

Do I need flood insurance if I live in California, New York or New Jersey? 

Although flooding is not normally an issue in most of the United States, you will want to make sure you have coverage for your home if you live in an area prone to heavy rain. Policies differ by type and state, so check with your agent for more details on what exactly you’ll be getting.

Can I get flood insurance for my mobile home? 

If you live in a mobile home park, you should confirm that they have flood insurance for the park itself, or at least that it's available to you through your homeowners policy as supplemental coverage. 

What do I need to know about carbon monoxide poisoning? 

Every state has regulations about what levels of carbon monoxide (CO) can be allowed in a building. Rooms or areas with high levels of CO present a risk for indoor air quality and increased fire risk. There are some signs and symptoms of CO poisoning such as headache, nausea and dizziness. These may be caused by other health factors, but if not treated appropriately can be fatal.

Do I need life insurance? 

Life insurance doesn’t have to have a death benefit. That means that you could pay for your funeral or continue paying your mortgage in the event of your death. This is why most people who get life insurance are those above the age of 55. It is also important to understand what kind of coverage you want, and what would be best for you as well as your family.

What is critical illness coverage? 

This policy will pay a benefit if someone in your immediate family becomes ill and eventually dies due to critical illness. Examples include: cancer, diabetic coma, heart attack and stroke.

What is a variable life annuity? 

Life insurance policies like this one are designed to help people manage their money for the long term. You can choose from multiple investment options that are riskier or less risky depending on your financial goals.

Why would I want guaranteed universal life? 

Guaranteed universal life has a death benefit, but you can also use the money that is invested in the policy for other expenses in your lifetime. This includes using it to pay off loans, or if you need some money for an emergency situation. It’s important to understand your options and what kind of coverage would be best for your financial goals.

How do I know if I need long-term care insurance? 

Long-term care insurance is designed to cover the cost of nursing home, assisted living or in-home care after dealing with a significant medical issue. Once your illness has passed, you will no longer be eligible for coverage. This means that you may not have any coverage for later years as you get older. These policies are designed to help people avoid the high costs of these services later on in life.

What are the advantages of long-term care insurance? 

Many older Americans have no way to pay for expensive health care if they become disabled, or need assisted living.

Conclusion

Insurance is an important part of any financial strategy. Sometimes it can seem confusing, but it doesn’t have to be.

Hopefully now you have a better idea about which policy is best for you and your family. If you’re still unsure, don’t hesitate to reach out to an agent and they can help you find the right coverage.