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A Simple Answer to the Question: What Is Homeowner's Insurance?

One of the biggest purchases—in fact, the biggest purchase—that you'll probably ever make during your life is the purchase of your home.

As with any purchase this large, you’ll want to make sure that your investment is properly protected. Since you can't actually build a forcefield around your home, the next best thing is to insure your home so that if any damage happens to occur, you can recoup your losses.

If you do happen to own a home and you're not properly insured, it's a very good thing that you were wondering, “what is homeowner's insurance?”

Having your home properly insured will keep you safe from the financial ruin and chaos that a disaster like fire can cause.


What Is Homeowner's Insurance and Who Needs It...

Essentially, homeowner's insurance is needed by anyone who owns a home, no ifs ands or buts. Is homeowner’s insurance required by law like vehicle insurance? No, it's not. Does that mean it is OK if you don’t have homeowner’s insurance? Absolutely not.

First of all, if you have a mortgage, than your lender will require you to have homeowner's insurance. They, of course, want to make sure that the property they essentially own is covered in case of a loss.

Even if you don’t have a mortgage you’ll still want to make sure your number one asset, your home, is protected.

There are some obvious reasons why you'll want insurance on your home, as well as some not so obvious reasons.

Let's talk about some of these reasons...


Tragedy Strikes...

Fire, lightning strikes, windstorms, explosions, sinkholes, etc., can all damage or completely destroy your home. While fire is for the most part preventable, most other tragedies you can't prevent. It's you against mother nature and chance. Not having insurance to protect against these occurrences is like playing Russian roulette. The chances are not exceptionally huge that something major will happen to your home, but there is a chance nonetheless.

According to the U.S. Fire Administration and FEMA website there were 365,000 residential fires reported 2011. Those fires caused $6.6 billion in damage.

Now that's just fire. Add up all the other perils that could possibly damage a home and you're looking at a pretty good chance that in the lifetime of a mortgage, your home could be damaged in one way or another.


Other People Strike...

Unfortunately, perils don't only come in the shape of natural disasters. Vandalism, burglary/theft, and riots are other human-created perils that can also strike your home.

Homeowner's insurance will cover this as well. It's not just the structure of your home that's valuable and that you'll want to protect, you've also got to protect the things within your home.

Of course there are different levels at which your personal belongings will be covered. For instance, with some insurance plans you'll be covered up to a certain amount for your personal possessions, or you can be compensated at market value.

Either way, if your television is stolen by a thief or your home is destroyed by vandals while you're not home, you'll want to be compensated for those items.

So now that you know the answer to the question, “what is homeowner's insurance,” it’s time to learn the reasons WHY you should have insurance to protect a home that you own.


You'll Want to Protect Your Visitors and Those Who Stumble Across Your Property...

We've all heard at least one story about how someone that somebody knows has had to pay the medical bills of somebody that got hurt on their property.

When someone comes to your home and falls down your stairs or slips on your marble floor, you're ultimately responsible for their medical bills. Either way you spin it, it's your fault that they were hurt if they were hurt in your home. In other words: you are liable. Therefore, you should be insured for that liability.

Having homeowner’s insurance that will cover the medical bills if someone injures themselves in your house is much better than fretting and worrying each time you have a visitor over. Of course, there are different amounts that you can insure coverage for, but the bottom line is that you don't want to have to pay for costly medical bills out of your own pocket.


Beyond the Question “What Is Homeowner's Insurance.” This Is As Important As the Fact That You Need It...

We've already established the fact that you absolutely need homeowner's insurance if you own your own home.

But something else that you'll need to make sure of is that you are insured for enough money.

It's one thing to be covered, but you've also got to make sure that you've got enough coverage. This means assessing the value of your home and the price to replace that home correctly. It's also very important that you take inventory of your possessions and know exactly what everything is worth. Furthermore, you must make sure to understand your policy and what your insurance covers and covers against. These are all vital things to know, things that many people don’t do. When incorrect assumptions are made that certain things are covered when they really aren't, people suffer unnecessary loss.

So bottom line... What is homeowner's insurance? It's something that you MUST have or you're putting yourself and your future in great risk of financial tragedy