Home owners insurance is a coverage you can purchase from many carriers to help protect your home and personal property in the event of a covered loss.
Home owners insurance usually protects you if you were ever found liable for an action inside or outside your home. This is a very important coverage in this day and age with a number of people being sued for their actions or actions of one of the family members who live in the home. No carrier is the same and covers you the same way so the best way to find information about what you are covered for and what losses you are covered against you need to speak with your agent or look at your policy pages supplied to you by your insurance company.
Home owners insurance is not required unless you have a mortgage on your home, then your lender will require you to cover the home in the event of a loss so they know their investment is protected. Mortgage companies can force insurance on your home if you do not provide them with the documents stating you currently have coverage for the mortgage amount. Typically your home owners coverage will be over the amount of your loan because what you owe on the home and what it would cost to replace your home can be dramatically different. Having a discussion about how much coverage you need to replace your home is something an experienced agent can help with and explain.
Many times your insurance will be covering your home for more than you owe on it. This varies between carriers and this is where a yearly review of your insurance is important. In areas where home prices are increasing because building costs are increasing people may have their home owners for less than it would cost to rebuild the home. So in the event of a “total loss” the customer would not receive enough money to rebuild their home back to its original size or quality. Some carriers have protection against that happening to their clients but the client still needs to have a reasonable coverage amount.