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Buying a home is a major investment. Over the years, add in maintenance costs, possessions and upkeep, and you have a costly investment. 

Homeowners insurance, also known as home insurance, is a form of property insurance policy that provides coverage for a private residence. A homeowners policy typically covers losses and damages to your personal residence, as well as furnishings and other assets within your home.  

If you harm someone else or damage their property, homeowners liability insurance can compensate them. Coverage often pays for incidents on or off your property. 

Most mortgage lenders will require a homeowners insurance policy. 

What does home insurance cover?

As mentioned earlier, homeowners liability is just part of a comprehensive homeowners insurance plan. Other important areas of coverage include: 

• Structure protection: Insures your house, garage and often detached buildings on the property. Often provides coverage in case of damage from fires, weather, theft or other hazards.

• Possessions insurance: Pays for damaged belongings. Protection might cover everything from food in the pantry to computer systems.

• Liability coverage: Additional expense protection: Do you need to move out temporarily after an accident? Let this coverage reimburse you for expenses such as dining or hotel bills.

Your homeowners insurance policy may not cover flood or earthquake damage. Talk with your insurance agent about these types of coverage. 

Are all kinds of home insurance alike? 

Your home is unique, from its shape and size, to the materials used to build it. In addition, your possessions have wide-ranging values. Any loss is costly, so you’ll want to maximize your benefits.  

• Ensure you have enough structure protection to rebuild the home. Keep in mind, the construction value differs from the cost to buy a new home.

• Ask your insurance agent to adjust your possessions coverage to match the full value of your belongings as closely as possible. That way, you’ll have fewer limitations when making a claim. Keep in mind, some policies will limit how much they pay per item.

• Your policy likely includes a deductible on damage. It’s a good idea to take as high a deductible as you can manage—this may lower your premium cost.

Homeowners coverage is critical to your overall financial well-being. Having a policy means you don’t have to pay for covered home damage in-full, out of pocket.  

Larry Burkman Agency covers homeowners in Huntsville, Madison, Morgan and Northern Alabama.

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