Homeowners Insurance in the US.
Homeowners insurance is a type of insurance designed to protect both property (including structures) as well as liability arising from ownership. Homeowners insurance has become fairly standardized in the US thanks to the Insurance Services Office, founded in 1971. Now consumers can count on easily finding affordable and relatively straight forward homeowners insurance throughout the US.
Homeowners insurance is typically required by lenders providing the owner of a property with a mortgage. This is done to ensure that if there is damage done to the property, the mortgage lender can be made whole (that is, repaid).
There are various levels of homeowners insurance available in the US. By far the most common type is known as “All Risk” insurance, meaning that the property is insured against all risks, other than those specifically excluded. This could also be called specified exclusion, but “All Risk” is the common convention.
It is important to note that the typical “All Risk” insurance excludes flood and earthquake (as well as power failure, neglect, war, nuclear hazard, intentional loss, and concurrent causation). If you live in a flood or earthquake hazard area you’ll probably want this coverage as well, supplied as a separate policy. Typically, mortgage lenders will require this type of insurance if you live within a recognized hazard area.
Homeowners Insurance Pricing
Homeowners Insurance is typically priced based on 2 core factors, risk and value. In most cases homeowners insurance is a nominally extra cost associated with the purchase of a home using a traditional mortgage loan. The homeowners insurance payment is typically collected with the mortgage payment and held in escrow by the mortgage lender and paid to the insurance company as required.
Typically, riders can also be attached to your homeowners insurance policy. A rider specifies a specific item or occurrence to cover. One common rider is coverage for jewelry, especially wedding rings. If you have anything of particular importance to you, be sure to discuss with your agent to ensure that you are covered.
Homeowners Insurance Specifics:
Other Forms of Homeowner Insurance: