Homeowners Insurance

Homeowners Insurance

Here's a topic I'm sure I haven't covered yet:  Homeowners Insurance.  Let's face it, if you plan on investing in a home, it only makes sense to protect that investment.  But the whole process of getting homeowners insurance can be a daunting task, and not for the faint of heart.  Here's some helpful information to guide you on your way.

Homeowners insurance doesn't have to be overwhelming.  Yes, it's insurance, and like any insurance, it can be tedious, convoluted, and for some odd reason difficult strictly for the sake of being difficult.  It almost seems like someone out there wants this to be tedious just so you buy the "best coverage".  Tricky tricky, but let's face it, insurance companies are in the business of making money.  I won't hold the blame toward them, but I do think being better informed makes for common sense.  Let's start with the basics.

  • What is homeowners insurance?  Homeowners insurance is in place to protect against two major risks; the first is damage to your own property, the second is liability.
    • Property coverage refers to coverage for your dwelling, loss of the use of the dwelling, other structures on your land, and your personal possessions, including protection against theft. (source: vermont.gov)
    • Liability coverage protects you from being liable or financially responsible for injury to other people or injury to their property. It also covers other people's medical costs when you are the responsible party.  (source: vermont.gov)

Fun Fact:  ​Homeowners insurance is NOT required by law, but chances are you are required to have it if you have a mortgage.

  • What types of homeowners insurance are there?  Yes, there is more than one type (of course) and choosing one that fits your needs is important.
    • Basic Coverage:​  Typically this covers a very minimal amount.  It applies to both dwelling and personal property, and protects against fire, lightning, vandalism, malicious acts, and usually one or more of the extended coverage areas
      • ​Extended Coverage Perils usually covered:  riots, explosions, vehicles, civil unrest, smoke, hail, wind, glass damage, and aircraft damage
    • ​Broad Coverage:  Typically this includes everything from basic and extended coverage areas, but will also include:
      • ​Falling objects, snow / sleet / ice damage, volcano activity, plumbing or appliance damaging your property or dwelling, pipes freezing, and some other obscure items that honestly wouldn't apply in Vermont anyway.
    • Other Coverage:  There is a whole bunch of other options, to include tenants in a building they do not own, condominium insurance, modified coverage which is essentially basic coverage but more restricted, and special coverage options.

​​Your homeowners insurance policy should clearly define any terms used (clear explanation of the wordage), state what it covers, explain what it excludes, and provide any conditions of the coverage you are getting.  You can also have endorsements, which are amendments to the policy which add, remove, or otherwise change the coverage you have in your policy.

More on this tomorrow!  

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