Answers to the Most Common Home Insurance Questions

What is the value of home insurance? This is the first question that homeowners and renters ask insurance agents. For homeowners the benefits are the protection of your house, assets and personal property and for renters, home insurance provides protection for your personal possessions. Both renters and homeowners are protected by home insurance from exposure to lawsuits that can result if a person is injured in your home or you cause damage to their personal property.

What level of home insurance protection should you purchase? That depends of the number of assets you need to protect. If you assume some of the risk through carrying a deductible; the amount of money you will pay for damages before the insurance coverage begins, you will be able to lower your home insurance premiums and avoid filing small claims. If you own many expensive items such as antiques or electronic equipment you may need to purchase additional coverage for these items.

How are home insurance rates calculated? Your credit history and age play a role in determining your home insurance policy premium. The construction materials that would be required to rebuild the home are also important; houses built from wood represent a higher risk than those built with masonry brick. Older homes are often a problem for home insurance companies because they may not be in keeping with today's building codes where new homes will receive discounts.

The geographical area and access to fire protection is considered in determining home insurance rates; homes that are located in floodplains or earthquake regions will have a higher insurance premium. The distance from the home property to a fire station is also important, the further away a home is from fire hydrants or fire departments the more you will pay for fire insurance.

What is basic home insurance coverage? Home insurance will cover basic property damage, personal liability, medical payments and additional living expenses if you are forced to live outside your home due to a disaster covered in your policy.

What is home insurance property damage coverage? Your home insurance protects your property from damage by perils such as windstorms, fire, or hail. Flood and earthquake are covered by separate insurance policies purchased through a private insurer.

What protection does home insurance provide for personal property? The basic home insurance policy protects the contents of your home for a certain amount. Additional coverage must be purchased for expensive items.