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#1. What did you learn about this topic that surprised you the most? 

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#1. What did you learn about this topic that surprised you the most? 

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Prior to researching this topic, I did not realize how important and crucial home insurance is. I found it surprising that homeowners insurance not only covers or protects the structure of your home, but also your personal belongings in the case of a robbery.

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Photo #1 - Basic Elements of Home Insurance

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Photo #1 - Basic Elements of Home Insurance

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This image is a wonderful and informative visual that condenses the most important aspects needed to understand what home insurance is. I particularly liked how this image gave examples of aspects of your home that may require home insurance. For instance, the foundation, windows, doors, televisions, clothing, or even jewelry.

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Website #1 - Homeowners Insurance Basics

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Website #1 - Homeowners Insurance Basics

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This website outlined the basics of homeowner’s insurance. It begins by outlining the fact that most people do not think about their home insurance until they truly need it. However, understanding different homeowners insurance policies is very important, especially if you ever need to rebuild your home, or replace personal belongings.

I liked this website in particular as it provided tips for ensuring your home to its value. For instance, when insuring your home, they suggest not insuring the home for the market value. Instead, they recommend insuring for a higher value, as the cost of rebuilding a home may be higher than the price it could sell for.

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Insurance is something most people don't even want to think about until they need it the most. But, understanding what is and isn't covered in your homeowners insurance policy can mean the difference of being able to rebuild your home and replace your personal belongings. Homeowners need to do annual insurance policy "check ups" to make sure they keep up with local building costs, home remodeling and inventories of their personal belongings.

The typical homeowners insurance policy covers damage resulting from fire, windstorm, hail, water damage (excluding flooding), riots and explosion as well as other causes of loss, such as theft and the extra cost of living elsewhere which the structure is being repaired or rebuilt.

Your policy also covers your legal liability (up to policy limits) if you, members of your family or even your pets hurt other people or their property, not just in your house, but away from it, as well. Click here for more information on general liability coverage and umbrella policies.
When you insure your home, you are really insuring two distinct things:

1. The structure of your home

2. Your personal belongings

The Structure of Your Home
Three ways to insure the structure of your home:

1. Replacement Cost. Insurance that pays the policyholder the cost of replacing the damaged property without deduction for depreciation, but limited to a maximum dollar amount.

2. Extended Replacement Cost. An extended replacement cost policy, one that covers costs up to a certain percentage over the limit (usually 20%). This gives you protection against such things as a sudden increase in construction costs.

3. Actual Cash Value. This covers the cost to replace your home minus depreciation costs for age and use. For example, if the life expectancy of your roof is 20 years and your roof is 15 years old, the cost to replace it in today's marketplace is going to be much higher than its actual cash value.

Tips for Insuring Your Home to Value
You should insure your home for the total amount it would cost to rebuild your home if it were destroyed. That's not the market value, but the cost to rebuild. If you don't have sufficient insurance, your company may only pay a portion of the cost of replacing or repairing damaged items. Here are some tips to help make sure you have enough insurance:

For a quick estimate on the amount to rebuild your home: multiply the local building costs per square foot by the total square footage of your house. To find out the building rates in your area, consult your local builders association or a reputable builder. You should also check with your insurance agent or company representative. (Note: This is only an estimate and shouldn't replace annual coverage reviews).

Factors that will determine the cost to rebuild your home: a) construction costs b) square footage of the structure c) type of exterior wall construction-frame, masonry or veneer d) the style of the house (ranch, colonial) e) the number of rooms & bathrooms f) the type of roof g) attached garages, fireplaces, exterior trim and other special features like arched windows or unique interior trim.

Check the value of your insurance policy against rising local building cost EACH YEAR. Check with your insurance agent or company representative if they offer an "INFLATION GUARD CLAUSE." This automatically adjusts the dwelling limit when you renew your policy to reflect current construction costs in your area. However, you still should keep up with local building costs by checking in periodically with your local builders association.

Check the latest building codes in your community. Building codes require structures to be constructed to minimum standards. If your home is severely damaged, you might have to rebuild it to comply with the new standards requiring a change in design or building materials. These generally cost more.

Do not insure your home for the market value. The cost of rebuilding your home may be higher or lower than the price you paid for it or the price you could sell it for today.

Most lenders require you to buy enough insurance to cover the amount of your mortgage. Make sure it's also enough to cover the cost of rebuilding.

Advise your insurer and increase the limits of your policy if you make improvements or additions to your house.

Your Personal Belongings
Two ways to insure your personal belongings:

1. Replacement Cost Coverage. Insurance that pays the dollar amount needed to replace damaged personal property with items of like kind or quality without deduction for depreciation.

2. Actual Cash Value. Insurance under which the policyholder receives an amount equal to the replacement value of damaged property minus depreciation. Unless a homeowners policy specifies that property is covered for its replacement value, the coverage is for actual cash value.

Here are a few things to keep in mind when you're insuring your stuff:

Check the limits of your policy on personal items, such as jewelry, silverware, furs and computer equipment. If the limits are too low, consider buying a special personal property endorsement or a "floater." An endorsement is an addition to your policy. A floater is a form of insurance that allows you to insure valuable items separately.

Make an inventory of everything you own in your home and in other buildings on the property. Write down major items you own along with all available information, such as (a) serial numbers (b) make and/or model numbers (c) purchase prices (d) present value (e) date of purchase. Click here for more on home inventories.

Document your inventory. Take either still or video pictures and attach receipts to the inventory when available. Store the inventory and visual records AWAY from your home-perhaps in a safe deposit box.

Update the inventory when you make major purchases.

The most important thing you can do to safeguard your home and property is to understand that your insurance policy is a contract and you need to know what's in it. Your insurance agent or company representative will be able to walk you though it and answer any questions.
The bottom line: Don't put your policy up on a shelf somewhere and let it collect dust! Review your policy every year.
When Buying a Home, Put Insurance on the Top of Your "To-Do" List

Are you buying insurance on a new home, selling a home, or just wanting to gain a better understanding of the factors that affect your ability to get and keep affordable homeowners insurance? Let us provide you some of the major keys to how homeowners insurance works, help you avoid common pitfalls and offer some ways you can save money.

Most lenders won't provide a mortgage without homeowners insurance coverage, so work with your insurance company or agent, together with your Realtor, to help you move into and protect your dream home.

Download the brochure or request a copy by mail. Please include your mailing address.

Know what your homeowners insurance covers.

It typically covers damage from fire, windstorm, hail, water damage (excluding flooding), riots, explosion, as well as other sudden and unexpected losses., i.e. theft, and the extra cost of living elsewhere while your home is repaired or rebuilt.

It covers your legal liability (up to policy limits) if you, members of your family or even your pets hurt other people or their property, not just your house, but away from it, too.

Do annual insurance policy "checkups" to keep up with local building costs, home remodeling and inventories of personal belongings. Make sure that you have updated insurance to rebuild or repair your home for what it would cost in the current building market. Accurate inventories of personal possessions make for faster and smoother claims' settlements. Photos and videos offer easy ways to document your stuff.

Key Consumer Tip:
Understand what is and isn't covered by your homeowners insurance policy to ensure that you are able to rebuild your home and replace your personal belongings.

Know the factors that affect your homeowners insurance cost and policy renewal.

The square footage of the house and any additional structures, such as a detached garage.

Building costs in your area.

The type of construction, materials, and features on your home, including the roofing.

Crime rates in your neighborhood.

The likelihood of damage due to a disaster, such as a wildfire, hail or wind. For example, Colorado's homeowners insurance rates are impacted by the state's volatile catastrophe trends. Click here for a Colorado analysis from the Insurance Research Council's Trends in Homeowners Insurance, 2015 Edition.

Distance to a fire hydrant and a fire station, whether your neighborhood is protected by professional or volunteer firefighters, and any factors that affect the time it would take to extinguish a fire in your area.

The condition of the plumbing, heating and electrical systems in your home.

Many companies use good credit history to offer you a discount or as one of the factors in deciding to sell a policy to new customers.

The number of claims you file over a certain period of time can put you at risk for non-renewal or higher premiums. Insurance is designed for large, "sudden and unexpected" losses, not for minor "wear and tear."

Key Consumer Tip:
Many factors determine what you'll pay for homeowners insurance, so whether you're buying or building a new home or just reviewing the cost and coverage under your current homeowners insurance policy, be aware of what affects your bottom line.

To learn more about the cost of homeowners and renters insurance, or to view state-by-state costs and statistics, click here to see Insurance Information Institute data.

Avoid common pitfalls that may result in paying higher premiums or even losing insurance.

Consider carrying a higher deductible. It will save you money on your premium and discourage you from filing small claims that may put you at risk for non-renewal.

Do routine home maintenance check-ups. Preventing damage from water losses and other typical in-home disasters that can often be avoided may save you from future headaches and financial risk.

Get insurance early! Learn the claims history on the property you own and the property you're buying. If you want to know of prior losses that may impact the availability or price of your new home's insurance, ask the seller to provide a copy of the home's loss history report (called a CLUE ® or A-PLUST Report) with the disclosure statements. This is a record of home insurance claims that have been reported or filed in the past five years. Finding out what claims have been filed in recent years, such as water loss claims, can affect whether the property is considered higher risk. When you're selling your home, also make sure you know what the loss history is on your own home.

Do your homework. To order a CLUE ® Report, see www.choicetrust.com. To order a copy of your A-PLUST Report, call 1-800-709-8842.

Key Consumer Tip:
The more information you have going into the home buying process, the less likely you are to encounter pitfalls along the way. You wouldn't even think about buying a used car without knowing its history. The same goes for your dream home.

Keys to saving on homeowners insurance.
Consider taking some steps to make yourself a better risk and save money.
Install safety & security devices. You can often save up to 15 percent on you premium with deadbolt locks, fire extinguishers, smoke alarms, burglar alarms and fire alarms that alert your local police and fire stations. Check with your agent to see if your insurance company has specific requirements to qualify.

Increase the deductible on your homeowners policy. Increasing your out-of-pocket payment from $250 to $500 or even $1,000 can save you money on your premium and it will discourage you from making small claims, which could put you at risk for being non-renewed.

Check into a multi-policy discount. Some companies offer a price break for having more than one type of policy with the same company.

Maintain good credit. Many companies provide discounts or consider good credit as one of the factors when selling new policies, so it can really pay off to manage your personal finances.

Invest in hail and fire resistive roofing products. Your roof is the most vulnerable part of your home and many companies consider the roofing materials into the premium you are charged. Depending on where you live, some companies charge a percentage, rather than a dollar deductible or surcharge on a roof made out of high-risk materials, like wood shingles or shakes.

It pays to shop around for insurance coverage. Keep in mind that the cheapest policy is not necessarily the best. Selecting a company that provides good customer service and one that fits your personal needs is critical, especially when it comes time to file a claim.

Home Buyer Checklist

Check on insurance early. When buying a home, the sooner you check with an insurance company or agency to price a policy and find out if you can insure that property, the smoother the process will be.
Check the claims-filing history of properties you are selling and buying.

Get a copy of your own loss history report, such as a CLUE report from ChoicePoint or an A-PLUS report from Insurance Services Office (ISO).

Ask the seller to provide a copy of the home's loss history report (called a CLUE or A-Plus Report) with the disclosure statements. This can alert you to any damage that may have occurred to that property. Depending on your insurance company, the loss history of your potential home may affect your insurance.

Make sure you buy the amount of insurance you need. Take the time to properly insure your home. Make sure that you have enough coverage to:

Rebuild the house if it is destroyed by fire or another insured disaster.

Replace everything in it.

Protect your assets if someone is injured on your property.

Consider a higher deductible. If you can afford a higher out-of-pocket deductible, it will save you in the short-term on your insurance premium and also discourage you in the long-term from making small claims that could put your insurance at risk for non-renewal.
Ask about extra coverage.

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Insurance is something most people don't even want to think about until they need it the most. But, understanding what is and isn't covered in your homeowners insurance policy can mean the difference of being able to rebuild your home and replace your personal belongings.

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This website is an excellent resource from the government of Canada. This website is a reputable resource which can be utilized to discover information that covers why you may need home insurance, who and what home insurance policies cover, and even outlines how insurance companies calculate your monthly fee called a premium. The website provides clear examples regarding how home insurance protects you. For instance, home insurance will even protect you if a fire starts in your house and causes damage to your neighbour's home.

I chose this website, as I know the information is coming from a reputable source. New homeowners who are looking to purchase homeowner’s insurance may find it overwhelming and may struggle to find accurate information. I liked how this website is current and up-to-date regarding new and emerging information and even covers the topic of condo insurance for those who do not own a home.

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Understanding home insurance

Home insurance helps protect your home and your belongings in case of theft, loss or damage. It may also help cover additional living expenses if you're temporarily unable to live in your home. These may include living in a hotel or renting a home.

Your home insurance may cover:

Insurance companies may refer to home insurance as property and casualty insurance. Property and casualty insurance also includes car insurance, business insurance and disaster insurance.

Who your home insurance policy covers

Generally, your home insurance policy covers you and your family members.

If you share your home or if you rent a part of it, you must inform your insurance company.

Check with your insurance company, agent or broker to review who your policy covers.

Condominium insurance

Condominium (condo) insurance is different from home insurance. It covers damage or loss to the inside of your condo and your storage locker. It also covers personal liability claims for someone injured in your condo.

Your condo corporation has an insurance policy that covers the outside structure of the building and its common areas.

Condo insurance may pay for:

Review your condo insurance policy coverage and your condo's corporation insurance policy coverage.

Tenant's insurance

You may want to consider buying tenant's insurance if you live in an apartment or rent a home. Insurance companies may refer to it as renter's insurance.

You should have enough insurance to cover the cost of replacing everything in your home.

Tenant's insurance may pay for:

Insurance for a home-based business

Consider getting business insurance if you have a home-based business.

Home insurance isn't business insurance. If you have a home-based business, you must notify your insurer. Using your home for purposes that your insurer isn't aware of may cancel your policy.

Home insurance generally won't cover claims related to your home-based business. Your home insurance policy may provide limited coverage for damage or loss of business equipment. This coverage is only for the business equipment that is in your home. Business equipment may include computers and power tools. The limited coverage may not be enough to cover the cost of repairing or replacing your business equipment.

Home insurance won't cover:

equipment that is damaged while in your home, if used for business purposes

stolen or damaged equipment while in your vehicle or outside of your home

stolen or damaged tools while in your vehicle or outside of your home

injury to a client while visiting your home, also known as personal liability

Review your home insurance policy to confirm what coverage, if any, it will provide for a home-based business.
Learn more about the types of business insurance coverage.
Home insurance coverage

Make sure you understand what your home insurance covers. You should also understand what types of settlement to expect if you make a claim. Speak with your licensed insurance agent or registered insurance broker.

Types of home insurance coverage

Coverage is the maximum amount of money your insurance company will pay you if you make a claim.

For home insurance, you may need a combination of 2 types of coverage: personal property coverage and liability coverage.

Personal property coverage

Personal property coverage protects you from loss or damage to:

your home or personal possessions

your car

To figure out how much coverage you need, make a list of all your possessions with the following information:

This list might be useful if you need to make an insurance claim in the future.

Liability coverage

Liability coverage protects you against legal liability for losses caused by:

injury to other people

damage to the property of others

Read your policy carefully before signing. Make sure you understand what your policy does and doesn't cover.

Ask your insurance agent or broker about anything you don't understand.
Learn more about the types of home insurance coverage.
What your home insurance policy doesn't cover

Home insurance doesn't cover predictable events and certain types of unexpected events.

Unexpected events

Your home insurance may cover certain types of unexpected events or accidents such as fire, windstorm, or theft. However, unexpected events such as earthquakes and floods are usually not covered. You may need to buy additional coverage for these types of events.
Learn more about home insurance for unexpected events and disasters.
Predictable events

Your insurance company doesn't cover events that they consider predictable and related to the maintenance of your home. For example, suppose you're away for more than 4 days in a row when it's cold outside. Your home insurance may not cover damage to your home because of your pipes freezing.

Home insurance premiums

Premiums are the amount you pay to buy insurance.

When determining how much you'll pay for premiums, insurance companies may consider factors like:

the type of residence you live in, such as a single family home, semi-detached or condo

characteristics of your residence, such as materials it's made of, age, size, location, replacement value

value of your property and contents they must insure

the distance between your home and a fire hydrant or a fire station

the crime rate in your neighbourhood

your claims history

the type of policy and coverage you selected

the amount of your deductible

A deductible is the amount of your claim that you agree to pay before your insurance company pays the rest.

Shop around for the lowest insurance premiums

Your premiums will vary from one insurance company to another. Shop around, ask for quotes and compare prices before deciding on one insurance company. In some cases, you may be eligible for a discount by combining both your home and car insurance.

In certain provinces and territories, insurance companies may charge higher premiums based on your credit score.
Learn how insurance works.
Home insurance settlement options

Your insurance company will review your claim and decide how it will settle it.

When you make a claim, you're always responsible for paying the deductible. The amount of money you get from your insurance company will depend on your insurance benefits.

Actual cash value

Actual cash value coverage gives you the cost of the item when it was new, minus depreciation. Depreciation is the loss of value due to the age and condition of the item. The depreciation depends on the item insured and the insurance company.

For example, suppose a fire damages your computer. Your insurer will only cover the cost of your computer based on its reduced value at the time of the claim.

Replacement value

Replacement value coverage gives you the actual cost to replace an item following a covered loss.

For example, suppose a fire damaged your computer. You bought your computer 5 years ago for $2,000. Your insurer will cover the cost of buying a new computer of similar quality to the one you lost.

Settling a claim if you have a mortgage

If you have a mortgage, your home insurance policy will usually include a loss payee clause. A loss payee clause makes your mortgage lender your beneficiary. In case of loss or damage to your home, your insurance company will pay your lender (your beneficiary). They'll pay up to the balance of your mortgage when you submit a claim.

When you make a claim, your insurance company may, at their discretion, give the money to either:

you, so you can fix your home when you submit a claim

your lender, who would then give you the money for repairs or replacement after you submit receipts as proof

Related links

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home insurance; condominium insurance; insurance for home-based business; tenant's insurance; covrerage; premiums; settlement options;

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learn about the differences between home insurance, condominium insurance, tenant's insurance, insurance for a home-based business; learn what home insurance covers, the premiums, the settlement options.

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Welcome to my padlet about homeowner's insurance! Here, you will find resources which aided with my comprehension of the home insurance world! Thank you!

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Video #1 - The i's on Insurance: Your Homeowners Coverage

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Video #1 - The i's on Insurance: Your Homeowners Coverage

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This is a short educational video that is packed with wonderful information regarding what home insurance is, and how it works. It provides the framework regarding what home insurance entails and is a great introduction video for people just learning about home insurance. In a simplistic format, the video covers the basic homeowner's policies such as “structure, belongings and liability”. An in-depth explanation is provided for each aspect of homeowner’s policies. For instance, home insurance will cover the structure of your house in the event of a fire, wind, or hail damage. Belongings cover any expenses related to any incident regarding your personal belongings, and liability covers harm to others that happened in your home.

I personally chose this particular video as I had no previous knowledge about home insurance. It provided an excellent way for people who are not knowledgeable about the topic to understand the basics.

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The i's on Insurance: Your Homeowners Coverage

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#2. Provide a real-life example of how this topic is relevant or interesting to you.

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#2. Provide a real-life example of how this topic is relevant or interesting to you.

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This topic is completely relevant to my life as I am planning on owning my own home someday. It is highly important that I understand different policies and what they entail so I can opt for the best policies to cover and protect my home/belongings and be protected against potential liabilities.

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This website started off by providing the reader with an insightful quote:

‘​​​​​Owning a home may be your largest single financial investment so it’s important to protect your property and contents against unforeseen risks with home insurance.’

The website covers all topics from buying home insurance to types of coverage, and even tips for home buying. The website also talks about risk management and how to identify and eliminate risks on your property.

I chose this website as it provided new information that I had not yet seen from other resources. For instance, how to manage risks, crisis management in the event of a disaster to your home, and how to prepare for emergencies in your home.

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This image is a great visual to provide first-time homeowners with the questions they should be asking when purchasing homeowners insurance. It is simplistic, however, covers important topics. I chose this image in particular as it combined aesthetics and information is a pleasing way to educate the viewer.

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The youtube video titled “Homeowners Insurance 101” is an introductory video for beginners who are starting to learn about homeowners insurance. It not only tells you what home insurance is but helps the viewer to truly understand. It depicts home insurance as reducing the costs associated with a risk, in this case, the risk of damage to your home, or someone being injured on your property. The homeowner will pay a monthly fee, called a premium, which is based on different criteria such as the home's age, or location. In exchange, you and your home are protected against a variety of different factors.

I chose this video as it outlined the aspects of homeowner’s insurance and the visuals greatly aided in comprehension. I found it useful how this video outlined the next steps to actually obtain homeowners insurance.

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Homeowners Insurance 101 (Home Shopping 4/6)

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This website was a great source to find out more information regarding what home insurance is. An aspect of this website that stood out to me was the easy-to-understand chart formatting of presenting the information. The website outlined different coverage types such as dwelling, personal liability and medical payments. Next, it talked about what each coverage type does and the typical amount.

I chose this website as I found it easy to navigate and I enjoyed how it provided information in a format that was easily accessible and comprehensible.

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Your home is more than just a roof over your head. It may be your most valuable asset - and one you likely can't afford to replace out of pocket if disaster strikes. That's why protecting your place with the right homeowners insurance is important.

What does homeowners insurance cover?

Standard homeowners insurance policies generally include six types of coverage:

Dwelling coverage covers the structure of your home, including the walls, floors, windows and roof. Built-in appliances, such as furnaces, are also typically included in your dwelling coverage. An attached garage, porch or deck would fall under your dwelling coverage, too.

Which events are covered: Most homeowners policies cover your dwelling for any cause of damage that isn't specifically excluded. Some of the most common causes of homeowners insurance claims include wind, hail, freezing, fire and lightning, according to the Insurance Information Institute .

How it works: A severe thunderstorm uproots a tree that falls onto your home, crushing part of the roof and attic. You'd pay your share of the repair cost - known as the homeowners insurance deductible - and then the insurer would pay the rest, up to your dwelling coverage limit.

Other structures coverage

Just like it sounds, other structures coverage provides insurance for structures on your property that aren't attached to your house. That could include a shed, fence or detached garage.

Personal property coverage

Personal property refers to your personal belongings - like clothes, furniture, electronic devices and appliances that aren't built in. Most homeowners policies cover these items anywhere, not just inside your house. So if someone steals your bike from outside a store, it'll likely be covered (minus your deductible).

These events, typically called "perils" in your policy, tend to include:

Sometimes called "additional living expenses," the loss of use section of your homeowners policy can come in handy if your home is too damaged to live in. Loss of use coverage may pay for hotel stays, restaurant meals or other expenses associated with living somewhere else if your home is uninhabitable after a disaster your policy covers.

Which events are covered: Liability insurance covers bodily injury and property damage to others, with some exceptions. For instance, your policy won't cover criminal acts or harm you cause on purpose. Nor will it pay for injuries or damage from a car accident (your liability car insurance would cover those).

Medical payments coverage

Like liability coverage, medical payments coverage pays if you cause physical injury to someone outside your household. However, no lawsuit is required, and you don't need to be found at fault for medical payments coverage to pay out.

What homeowners insurance won't cover

Even the broadest homeowners insurance policy won't cover everything that could go wrong with your home. For example, you can't intentionally damage your house and then expect your insurer to pay for it. Policies also typically exclude damage from other causes such as:

However, you can buy separate coverage for some of these risks. Flood insurance and earthquake insurance are available separately, and in hurricane-prone states, you may need or want windstorm insurance.

Expand your coverage with endorsements

Talk to your insurer if you have concerns about problems your policy doesn't cover. In many cases, you can add endorsements - which usually cost extra - that offer more coverage.

Below are a few of the most common home insurance endorsements. Note that availability may vary by state and company.

Identity fraud coverage pays expenses associated with identity theft such as lost wages and legal fees. Learn more about identity theft insurance .

Does homeowners insurance cover ... ?

This table shows common problems and whether your homeowners insurance policy will cover them.

Types of homeowners insurance policies

Homeowners insurance comes in several types, called "policy forms." Some types have more expansive coverage than others, so it's worthwhile to know the difference. Note that different insurance companies may have different names for these policies.

Most popular: HO-3 insurance

HO-3 insurance policies, also called "special form," are the most common. If you have a mortgage, your lender is likely to require at least this level of coverage.

HO-3 insurance policies generally cover damage to your home from any cause except those the policy specifically excludes, such as an earthquake or a flood. However, where it concerns your belongings, HO-3 insurance typically covers only damage from the perils listed in your policy.

Broadest coverage: HO-5 insurance

An HO-5 insurance policy offers the most extensive homeowners coverage. It pays for damage to your home and belongings from all causes except those the policy excludes. It's typically available only for well-maintained homes in low-risk areas, and not all insurers offer it.

Limited coverage: HO-1 and HO-2 insurance

Much less popular are HO-1 and HO-2 homeowners insurance, which pay only for damage caused by events listed in the policy.

Other policy types include HO-4 insurance for renters, HO-6 for condo owners , HO-7 for mobile homes and HO-8 - a rarely used type that provides limited coverage for older homes.

How homeowners insurance works

If your home is destroyed, your homeowners insurance company isn't likely to simply write you a check for the amount listed on your policy. First, you'll have to file a claim, documenting the damage. And your payout could vary depending on your coverage and deductibles.

Replacement cost vs. actual cash value

One key factor in your payout is whether your coverage will pay whatever it takes to rebuild your home, even if that cost is above your policy limits. This situation may arise, for instance, if construction costs have increased in your area while your coverage limits haven't changed. Here's a rundown of several options you may encounter.

Homeowners insurance deductibles

Homeowners policies typically include a deductible - the amount you have to cover before your insurer starts paying. The deductible can be:

When you receive a claim check, your insurer subtracts your deductible amount. Say you have a $1,000 deductible and your insurer approves a claim for $10,000 in repairs. The insurer would pay $9,000, and you would be responsible for $1,000.

Liability claims generally don't have a deductible.

Frequently asked questions

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What Does Homeowners Insurance Cover? 2023 Guide - NerdWallet

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Your home is more than just a roof over your head. It may be your most valuable asset - and one you likely can't afford to replace out of pocket if disaster strikes. That's why protecting your place with the right homeowners insurance is important. What does homeowners insurance cover?

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#3. If you could pass on your knowledge to a family member or friend, what do you think is the most important thing to pass on? 

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#3. If you could pass on your knowledge to a family member or friend, what do you think is the most important thing to pass on? 

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I would tell my close ones that with an investment as large as owning a home, it is so important to protect it and manage potential unforeseen risks. The best way to do so is by purchasing homeowners insurance.

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Video #3 - Understanding Your Home Insurance Policy

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Video #3 - Understanding Your Home Insurance Policy

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This short video was a great guide for people looking to purchase homeowners insurance. In an engaging format, the video provided the most important information regarding homeowners insurance. For instance, the video talked about different coverages and highlighted aspects of each type. As an example, the video talked about dwelling coverage to repair your home if it's damaged by a covered cost such as a fire.

I chose this video as it summarized the most important aspects to know about homeowners insurance. Unlike other videos I saw, it quickly mentioned all types of coverage to help in deciding what your coverage and policy needs are.

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Understanding Your Home Insurance Policy

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I chose this video as it represented what home insurance is, but in another way. Instead of educating the viewer about what home insurance is, this video demonstrated a realistic view of why an individual would want to purchase home insurance. We cannot prevent things from happening in life, no matter how much we would like to try. Therefore, purchase home insurance and you can be covered for any potential risk of damage to your property. I liked this video as it took a comedic approach to inform the reader about why one might need homeowners insurance.

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John Lewis Home Insurance - Let Life Happen (2021) -- BANNED