• Home
  • About
  • Advertise
  • Contact
  • Policy
  • Guest Post
  • Archive

One Cent At A Time

A Personal finance blog to get rich

  • Email
  • Facebook
  • Pinterest
  • RSS
  • Twitter
  • Beautiful Life
  • Becoming Rich
  • Beginners Guide
  • Extra Income
  • Productivity
  • Saving Money

Basics of Homeowners Insurance

October 6, 2021 Leave a Comment

Share this:

  • Tweet
  • Email

Ah, the joys of owning your own home. Financial and personal freedom is great, but there’s a lot of responsibility that comes with it.

Basics of Homeowners Insurance

From the days spent ferociously deep cleaning the kitchen only to cry with someone who comes in right after and messes it up to the ever-growing list of bills that need paying – a lot is going on. One of the bills high on the list — 85% of American homeowners have it — is home insurance.

Homeowners insurance is a safety net that protects you and your hundreds of thousands of dollars investment. Keep reading to learn the basics of homeowner insurance and the key bits of information you need to know.

What Does Home Insurance Cover

Let’s get straight to the point – home insurance covers a wonderful array of items and situations, but what your homeowner insurance covers will depend on the company and policy that you chose. It’s common knowledge — as it is with any insurance policy — that the more you play, the more you’re likely to be covered

That’s not necessarily always the case, however, as you’ll notice when shopping around that some insurers will charge hundreds more than another might even though they offer the same cover. Homeowners’ insurance coverage typically covers anything from hazard insurance to theft to broken appliances. The bullet points below will explain the areas most homeowner insurance policies cover:

  • Dwelling – covering faults with the structure of your home as well as any outhouses, sheds, and carports.
  • Personal property – This covers personal belongings and contents of the house like appliances and furniture.
  • Liability – This will cover legal expenses should you take a contractor to court, for example. Or, it can also cover harm caused to visitors while in your home.
  • Medical – Medical claims typically fall into a similar category to liability, and payouts are often made in smaller amounts to cover payouts.
  • Additional Living Expenses – This payout would cover fees you have to pay living in temporary accommodation because of an issue with your home.

When you look at how many things home insurance covers, it’s worth looking into policies to see what they cover. There are some things that most home insurance providers exclude, such as flood damage and earthquake damage.

Why Do You Need It?

There’s a short and sweet answer to this. If you want to be covered for anything, or even just some of what’s bullet-pointed above, you should have a home insurance policy. The alternative is having to pay outright for any repairs, thefts, or damages that might happen to your property. In particular, homeowners insurance is great at giving you a helping hand if you’re the victim of a break-in.

Considering over a million burglaries in the US happen every year, it’s handy to have something that would act as a safety net.

Remember, policies cover all sorts, and you can always request to have only certain things covered. It’s the same with auto insurance. If you don’t want a breakdown cover or windshield repair, your premium will be cheaper.

Shopping Around

You’ll notice when shopping around that there are different types of homeowners insurance coverage, as well as the things it will cover.

Actual cash value reimburses you the cost of your home and the value of any belongings inside it after subtracting depreciation. Replacement cost covers the value of your home and your belongings without considering depreciation. Guaranteed replacement cost is the most comprehensive as it’ll cover any repair or replacement, whether it’s less or more than the value on your home.

Those are the three main types of coverage insurers provide, and within that coverage, they will detail the specifics of what they will cover. For example, the oven breaks, and it was purchased at $800, and you have a guaranteed replacement – you can be sure that you’ll get a like for like model. You may find it useful to try insurance comparison websites, research insurer reviews, and research the insurers themselves to see which provider is a good fit for your needs.

There’s plenty of insightful information that should help you make an informed decision.

Homeowner Insurance Forms

Homeowner insurance forms are something you’re likely to see when shopping around. The forms essentially describe the different types of cover available, so it’s worth knowing which one covers what. Below are the forms you’re most likely to see:

  • HO-1 – Typically the cheapest type of insurance that covers the most basic ten risks. HO-1’s don’t cover liability.
  • HO-2 – Liability cover is still missing, but with an HO-2, you’ll get covered for 16 risks – including theft and fire.
  • HO-3 º This is still a basic cover, but it will satisfy mortgage lenders. It covers all risks, liabilities, medical coverage, and any additional living expenses.
  • HO-5 – HO-4 is designed for renters, but an HO-5 is the most comprehensive insurance package.

That basic overview of homeowners insurance should provide you with enough information to get shopping. Starting with a better understanding will help you find the best policy for you. Consider the type of coverage you want and how much you’re willing to spend and secure a policy that suits you.

LIKE THIS POST?
Thank you for subscribing.
Something went wrong.
I agree to have my personal information transfered to MailChimp ( more information )
Join our community of 8000+ subscribers to increase your net worth and build wealth
We hate spam. Your email address will not be sold or shared with anyone else.

Share this:

  • Tweet
  • Email
The tool that changed the way I manage my personal finance - Personal Capital, The Best Free Personal Finance Tool

Want to start a WordPress blog now? The onecentatatime.com blog is hosted by Siteground Web Hosting. For only $3.95 a month, Siteground can help you set up and host your website/blog quickly and easily.

About the Blogger Hi I am SB, a personal finance enthusiast with a career in software development. I am an immigrant to the USA since 2005, after being born and brought up in India. This 40 something technocrat lives and breathes personal finance whenever he gets time from the day job, job as a husband and a dad

Some links on this page may be affiliate links, if you make a purchase following the links, I may earn a commission. Read affiliate disclosure here
« Mortgage Insights 101: How To Refinance Your Dream Home
Too Hot To Handle? Is The Phoenix Real Estate Market Headed For A Crash?  »

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.



Create your own blog in 20 minutes and $20

Personal Capital, a free tool to change your financial health today

I use and suggest Upstart, for your personal loan need

CreditKarma, a free tool to check your credit scorey

I use Coinbase, for my crypto investments

101 Cents at a Time

101 Ways to Earn Extra Money on the Side
201 Frugal and Perfect Birthday Gifts
101 Ways to Save Money Everyday
101 Ways to be Better and Successful at Work
101 Ways to Save Environment and Energy
101 Frugal and Romantic Anniversary Ideas
101 Low-Cost Men's Fashion Ideas
101 Personal Finance Tips
101 Ways to Reuse Household Stuff
101 Things to Do, When Nothing to Do
101 College Graduation Gift Ideas
100 Tips for Ecommerce Startup
101 Ways to Enjoy Indoor During Winter
101 Ways to Beat Procrastination

Popular Posts

Quick Cash - How to make $100 legally, in a day
Living well on less than $15,000 a Year
Top survey sites for side income
What to do when auto repair goes wrong
Where should I invest my money now?
20 Ways to be productive and happy at work
51 Ways to get out of debt
Be a better person in 15 days, 15 ways
Income ideas for retirees and senior citizens
51 side jobs for college students
Urgently need a large amount of money?
Should I buy or should I rent?
Best Personal loan providers
25 Ways to save environment
25 DIY car repairs to save money
How to decorate office cubicle
How to show your wife you care
50 Financial Rules for Success
51 Frugal weekend family activity ideas
Become Rich By Saving 1 Hour Of Daily Wage
How much do I need to save for retirement?
How to negotiate your salary

Follow us on FaceBook

About Author

SB

Blogger by choice and IT manager by profession. Finance is my passion and gardening is my greatest satisfaction. Born in India, settled in US, Husband and a father. I created this blog in 2011 with a vision to help others. Thanks for your patronage. More info on my "about" page.

View all posts


Subscribe

Join our community of 5000+ subscribers to increase net worth and build wealth

Advertisements

Personal Stories

How I got a new HP computer replaced
Was COVID circulating in USA in fall of 2019?
How my credit score went up 800+
Why I didn’t invest in Bitcoins
How I controlled impulses to buy things
Why this blog is named One Cent at a Time

Subscribe via Email

Site Disclaimer

Disclosure of Material Connection: Some of the links in this web site are “affiliate links.” This means if you click on the link and purchase the item, I will receive an affiliate commission. Regardless, I only recommend products or services I use personally and believe will add value to my readers. I am disclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”
Read full Affiliate disclosure


One Cent at a Time is published by SB. The opinions expressed herein by him are his own and not those of his employer or anyone else. All content on One Cent at a Time is for entertainment purposes only. By reading this blog, you agree that SB and/or One Cent at a Time is not responsible for any actions taken after reading this blog. For the full disclaimer, click here .

Major Media Mention

One Cent at a Time Media Appearances

Copyright © 2023 One Cent At A Time · Designed by Nuts and Bolts Media