Homeowners insurance – basic questions answered
Do I have to have homeowners insurance?
As a general rule, yes. If there is a mortgage on your home, normally the lender will demand that you buy, and keep holding, homeowners insurance for the whole duration of the loan period. The premium for paying for the insurance may be escrowed with your loan payment or may be an item that must be paid for separately. Examine your loan documentation for the terms you must follow. In case when you own your house free and without debts, you might still want to think about coverage to protect yourself against property loss or damage, as well as liability lawsuits.
What does homeowners insurance protect against? Are all polices the same?
Homeowners insurance offers two types of coverage:
- Casualty, which gives protection for the dwelling and frequently the house’s contents
- Liability, which gives protection in case someone becomes injured on your property
All policies are not created equal. There are different stages of damage coverage, from an elementary policy that offers a minimum coverage of the house only and no contents whatsoever, to an extended policy for older, historic houses. Liability coverage usually begins at $100,000, but bigger coverage is available and frequently advised, depending on individual situation.
Is my landlord responsible for the damage to my property because of a fire in the apartment I rent?
No, he isn’t. The landlord’s policy covers only the actual building, and not your property in it. You are strongly advised to always think about renter’s insurance that will allow you to insure your property against perils identical to those homeowners insure against.
