Often a home is a person’s most important and greatest investment. However, with such an investment comes inherent risk. Should some sort of disaster strike would one be fully prepared for the consequences? If one has proper homeowner insurance this would indicate a level of preparation and an ensuing peace of mind. Homeowner’s insurance is a form of property insurance designed specifically for private residences; it provides financial protection for a myriad of things like damage to the home, its contents within and also protection from liability issues. This kind of insurance is designed for any homeowner who is smart enough to obtain it, however all lenders mandate this insurance if there is a loan received for the home purchase. Being fully familiarized with the intricacies and details of home insurance will serve the homeowner well in protecting his or her investment.
The way in which one utilizes his or her home insurance is not difficult to understand. When some kind of a covered loss occurs, one simply contacts the insurance company and files a claim. When the claim is filed, the insurance professional will inquire as to what happened and what the estimated dollar loss might be. Consequently, the insurance company will send an appraiser or insurance adjuster to the home to assess whatever damage has occurred as a result of the event and to ascertain the accuracy of your stated estimate of loss. The vast majority of insurance policies mandate a deductible to be paid before one receives compensation to replace or repair the property effected. The higher the deductible, the lower the premiums can be.
The following is a quick description of the kinds of coverage offered for the unexpected, which, of course, is what insurance is all about. The most common kinds of policy coverage are known as HO-1, HO-2, and HO-3 types. HO-1 and HO-2 are meant to specifically cover one’s home should any natural elements be the cause of the damage to the home. HO-3 generally receives the highest of recommendations from insurance experts as it covers the home and the personal belongings within in the event of a covered disaster. This form of coverage also provides liability protection, which covers a homeowner should someone be hurt on the property. Note that this applies only if the harm incurred was not a result of negligence on the part of the homeowner. The property protection aspect of the policy covers the house itself including any other structures on the property. Some policy types will only provide compensation for the current property value while others may provide the actual replacement cost regardless of the property’s depreciation.