“A Comprehensive Guide to Homeowners Insurance: What You Need to Know”

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What Is Homeowners Insurance?

Homeowners insurance provides financial protection against damage to your home and its contents. It enables you to repair or rebuild your home and replace damaged or stolen possessions. Additionally, it covers legal and medical expenses if visitors are injured on your property or if a family member injures someone or damages property outside your home. Homeowners insurance also typically helps pay your living expenses if your home is uninhabitable during repairs for a covered loss.

What Does Homeowners Insurance Cover?

The most common type of home insurance is an HO-3 policy, which includes four types of coverage:

• Home structure coverage: Pays to repair or rebuild your home if it’s damaged or destroyed by fire, smoke, wind, hail, lightning, theft, vandalism, and certain types of water damage. Other structures on your property, such as a detached garage, gazebo, or shed, are usually covered too.
• Personal possessions coverage: Pays to replace belongings such as furniture, appliances, clothing, and electronics if they’re damaged, destroyed, or stolen, either in your home or outside, such as in a storage space.
• Liability coverage: Pays medical expenses if a visitor to your home is injured. It also covers legal costs arising from the incident. Outside your property, liability insurance covers injury your family members cause to other people or their property.
• Additional living expenses (ALE) coverage: Pays some costs of living somewhere else while your home is being repaired or rebuilt after a covered loss.

What Is Not Covered by Homeowners Insurance?

Standard home insurance won’t cover every hazard that might befall your home. Here’s what homeowners insurance doesn’t cover:

• Damage due to floods, earthquakes, sinkholes, or landslides: You’ll need to buy separate insurance policies to protect against these risks.
• Damage from sewer, septic tank, or drain backups or sump pump failures: You may be able to add endorsements or riders to your policy to get this coverage for an extra cost.
• Routine wear and tear to your home: Home insurance won’t pay to upgrade your old electrical system or replace a worn-out washing machine.
• Losses above policy limits: Most home insurance policies set limits on liability for certain belongings, such as furs, jewelry, or computers.
• Losses due to unusual events: Damage or destruction caused by war, government seizure, pollution, infestation, or your intentional actions isn’t covered by home insurance.

Is Homeowners Insurance Required?

Homeowners insurance isn’t required by law. However, lenders generally require carrying at least enough home insurance to pay off the loan as a condition of approving your mortgage application. By ensuring you have the money to repair or rebuild after a covered incident, home insurance protects the asset that secures the loan—your home. Home insurance is so important to lenders that they’ll monitor whether you are paying your insurance premiums or, in some cases, roll your premium payments into your mortgage payments.

How to File a Homeowners Insurance Claim

When filing a home insurance claim, you can help speed the process by following these steps:

1. Call the police: If a burglary, vandalism, or other crime occurred, the insurance company will need a police report to support your claim.
2. Contact the insurance carrier: In most cases, you can either call the company or start a claim online. Once your claim is filed, you’ll be assigned a claim number and a claims adjuster.
3. Document the loss: Resist the urge to clean up until you’ve photographed and taken videos of any damage. Make a list of items that were lost, stolen, or damaged.
4. Make urgent repairs: If you need to act immediately to prevent further damage, such as boarding up a broken window after a burglary, go ahead. Just be sure to document these stopgap repairs with photos and keep receipts for any repair materials you buy or work you pay to have done.
5. Get estimates: Gather quotes for repairing or rebuilding your home from several licensed contractors. This information can help the insurance company determine the cost.
6. Receive your payout, minus your deductible: The insurance company may pay for your loss in one of several ways. You might receive a check for the full amount that you can use to pay for repairs or replacing your possessions. You might get partial payment now and the rest later. If you have a mortgage, your lender may receive the payment and may want to approve contractors or repairs before paying for them. If your belongings are insured for full replacement value, you’ll typically get a check for their cash value. After purchasing replacements and providing receipts to the insurance company, you’ll be reimbursed for the full cost.

Contact O1ne Mortgage for Your Mortgage Service Needs

At O1ne Mortgage, we are dedicated to helping you protect your most significant investment—your home. For any mortgage service needs, call us at 213-732-3074. Our team of experts is here to assist you with all your mortgage requirements.

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