3244 Brookside Rd 
Suite 140 
Stockton, CA 95219

Insurance Read Time: 2 min

Understanding Homeowners Insurance

Purchasing homeowners insurance is not only critical for protecting your home, your personal property and against any potential liability, but if you have a mortgage, your lender will require it.

What’s Covered

A homeowners insurance policy is a package of coverages, including:

  • Dwelling: Covers damages to your house and any attached structures, including fixtures such as plumbing, electrical and HVAC systems.
  • Other Structures: Pays for damage to unattached structures, including a detached garage, tool shed, fence, etc.
  • Personal Property: Covers personal possessions such as appliances, furniture, electronics, clothes, etc.
  • Loss of Use: Reimburses for additional living expenses while you are unable to live in your home.
  • Personal Liability: Pays claims if you are found liable for injuries or damages to another party.
  • Medical Payments: Pays the medical bills incurred by people who are hurt on your property or by your pets.

Remember, these coverages pertain only to losses caused by a peril covered by your policy. For instance, if your policy doesn’t cover earthquake damage, then losses will not be reimbursed.

Types of Homeowners Policies

The types of covered perils will depend on the type of policy you buy.

The Special Form is the most popular policy since it insures against all perils, except those specifically named in the policy. Common exclusions include earthquake and floods. Typically, flood insurance is obtained through the National Flood Insurance Program, while earthquake coverage may be obtained through an endorsement or a separate policy.

Limits of Coverage

Your policy will impose limits on the amount of covered losses.

If you have a valuable art collection or jewelry, you may want to secure additional insurance on those items.

Be aware of whether your policy insures for replacement cost (pays the cost to rebuild your home or repair damages using materials of similar kind and quality) or actual cash value (home value based on age and wear and tear), which may not cover all your losses.

Coordinating Umbrella Liability Coverage

Individuals with significant assets may want to consider attaching an umbrella policy to their homeowners policy, which provides liability coverage in excess of the liability limits of your current policy.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Share |
 

Related Content

Suddenly Single: 3 Steps to Take Now

Suddenly Single: 3 Steps to Take Now

Have you found yourself suddenly single? Here are 3 steps to take right now.

Your Shifting Risk Tolerance

Your Shifting Risk Tolerance

Time and market performance may subtly and slowly imbalance your portfolio.

The 12 Steps to Living Confidently: Savings and Cash Flow

The 12 Steps to Living Confidently: Savings and Cash Flow

Why is Cash Flow so important to understand?

 

Have A Question About This Topic?







Thank you! Oops!

The Importance of Business Valuation

You know your company inside and out. But do you know how much it’s actually worth on the open market?

7 Easy Ways to Improve Your Finances This Week

Improving your financial life doesn’t have to be tedious and time-consuming. These easy actions can lead to improvements in a

12 Days of Saving Tips

Having a set of savings tips to refer to can help make your short-term and long-term financial outlook merry and bright.

View all articles

Bi-Weekly Payments

This calculator estimates the savings from paying a mortgage bi-weekly instead of monthly.

Impact of Taxes and Inflation

Estimate the potential impact taxes and inflation can have on the purchasing power of an investment.

What's My Potential Estate Tax?

This calculator helps estimate your federal estate tax liability.

View all calculators

An Inside Look at Retirement Living

A number of questions and concerns need to be addressed to help you better prepare for retirement living.

Managing Your Lifestyle

Using smart management to get more of what you want and free up assets to invest.

Investment Strategies for Retirement

Investment tools and strategies that can enable you to pursue your retirement goals.

View all presentations

The Richest Man in Babylon

In good times and bad, consistently saving a percentage of your income is a sound financial practice.

Safeguard Your Digital Estate

If you died, what would happen to your email archives, social profiles and online accounts?

The Latte Lie and Other Myths

Check out this video to begin separating fact from fiction.

View all videos