Homeowners insurance, also know as hazard insurance or home insurance is a type of property insurance coverage created to cover homes and their contents. A standard homeowners insurance policy will typical cover damage to the interior or exterior of your house from damage caused by fire, hurricanes, lightning, vandalism or other disasters named in the homeowners insurance policy. Damage caused by floods, earthquakes, war, termites and poor home maintenance is typically not covered and will require separate riders if you need those type of coverages. Jewelry, art, antiques and other valuable items may not be full covered in a standard Homeowners insurance policy, so you may need purchase a separate “floater” policy to insures high value items for their full appraised value.
A homeowners insurance policy is a multi-line insurance policy, meaning that it includes both property insurance and liability coverage, and includes several personal insurance protections. A typical homeowners insurance policy covers losses to your home, its contents, loss of its use, loss of other personal possessions, and liability insurance for accidents that happen at your home. A homeowners insurance requires that at least one of the named insureds lives at the home. The dwelling policy is similar homeowners insurance policy, but used for residences that don’t qualify for various reasons, like vacation properties, second homes, and vacancy or non-occupancy of your home.
The cost of homeowners insurance depends on the cost to replace the house and which additional coverages (riders) are attached to the policy. The insurance policy itself is a lengthy contract, and names what will and what will not be paid when a loss occurs.
The homeowners insurance policy is usually a term contract in effect for a fixed period of time, typically one year. Most carriers lower premiums if the home appears to be a lower risk; like if the house is situated next to a fire station or is equipped with fire sprinklers and fire alarms; if the house has wind protection like hurricane shutters; or if the house has a security system. Other factors insurance carriers considered include your zip code, so if you live in a high-crime area or an area prone to forest fires, you insurance premiums will be higher.
There are essentially three levels of coverage available in most homeowners insurance policies. Actual cash value, Replacement cost, and guaranteed replacement cost. Actual cash value covers the house plus the value of your belongings after deducting depreciation. Replacement cost is the actual cash value without the deduction for depreciation, so you would be able to repair or rebuild your home up to the original value. Guaranteed (or extended) replacement cost is the most comprehensive and pays to repair or rebuild your home regardless of costs.
The cost of your homeowners insurance policy is important, but it is also important to choose a good insurance carrier. So when selecting a carrier, be certain you are insuring with a credible carrier that has a strong financial strength rating by one of the rating agencies like A.M.Best, Moody’s and Standard & Poor’s.
Aegis Insurance Markets, headquartered in Truckee, California, is an experienced insurance agency that can help with your homeowners insurance policy. Please complete the form on this page or call us at 800-579-6369 to get your personalized homeowners insurance quote.