Homeowners Insurance

Because everyone's needs are not the same, it is best to consult your agent to help assess your needs and find the insurance policy that is right for you.

What is Homeowners insurance?
Homeowners insurance provides financial protection against disasters. A standard policy insures the home itself and the things you keep in it.

Homeowners insurance is a package policy. This means that it covers both damage to your property and your liability or legal responsibility for any injuries and property damage you or members of your family cause to other people. This includes damage caused by household pets.

Damage caused by most disasters is covered but there are exceptions. The most significant are damage caused by floods, earthquakes and poor maintenance. You must buy two separate policies for flood and earthquake coverage. Maintenance-related problems are the homeowners' responsibility.

Why do you need homeowners insurance?
It is really all about protecting yourself financially if something unexpected happens to your home or possessions. That's important because chances are your home is likely one of your largest investments.

• If your home was destroyed by fire or damaged by a natural disaster, you'd need money to repair or replace it.
• If a guest in your home is injured, liability protection and medical coverage help pay expenses.
• If you are a victim of theft and vandalism, it can reimburse you for your loss or pay for repairs.
• If you are still paying for your home, your lender will require insurance.

It is important to know that homeowners insurance is meant to cover unexpected damage, not routine maintenance. Ask your agent to talk about what is covered and be sure to read your policy so you know exactly what's included and what is not.

Things to consider and questions to ask your agent
Here are few things to discuss with your agent that will influence your decisions.

• How much will it cost to rebuild my house and replace my belongings if they are damaged or destroyed? (Ask your agent to talk you through your home's features and the things you own so you can make an informed decision about coverage.)
• Does the insurance company have a good reputation for customer service? Is it known for paying claims fairly and promptly?
• What discounts are available? (Ask about multiple policy, security system and fire resistance discounts.)
• What's the process for filing and settling a claim? (Ask who to call and what happens after you file a claim.) 

Flood Losses 

There's something you should know: Flood losses are not covered by your homeowners insurance policy.

Floodwaters have the power to damage not only your home and sense of security, but also your financial future. How can you protect your most important investment in case of flooding?

Option 1: Hope that you'll receive Federal disaster relief if a flood hits.
Many people wrongly believe that the U.S. government will take care of all their financial needs if they suffer damage due to flooding. The truth is that Federal disaster assistance is only available if the President formally declares a disaster. Even if you do get disaster assistance, it's often a loan you have to repay, with interest, in addition to your mortgage loan that you still owe on the damaged property.

Most importantly, you must consider the fact that if your home is flooded and disaster assistance isn't offered, you'll have to shoulder the massive damage costs alone. The bottom line is that if you're looking for secure protection from financial loss due to flood damage, Federal disaster assistance is not the answer.

Option 2: Buy flood insurance and stay protected no matter what.
When disaster strikes, flood insurance policyholder claims are paid even if a disaster is not Federally declared. Flood insurance means you'll be reimbursed for all your covered losses. And unlike Federal aid, it never has to be repaid.

In general, a policy does not take effect until 30 days after you purchase flood insurance. So, if the weather forecast announces a flood alert for your area and you go to purchase coverage, it's already too late. You will not be insured if you buy a policy a few days before a flood.