New homeowners often have a lot of questions about home insurance. We understand that this can be complicated here at Rockwall Insurance, and we also know how important it is to get it right. To help, we have provided the following answers to some of the most common questions that we see.
What is the benefit of homeowner insurance?
Your homeowner’s insurance policy gives you coverage for many negative events that may damage your home. This coverage can pay for repairs to your house or to replace the home entirely if it has to be rebuilt. Homeowner insurance also covers the belongings that are in your home. If these are lost in a fire or stolen, for example, you can use your insurance policy to replace them. In some cases, you do have to prove that you owned these items before, which can be done with pictures, videos, receipts and things of this nature.
Moreover, if someone comes to your property and ends up getting injured, your homeowner insurance can help to provide the compensation that they need. This can be beneficial if they start a lawsuit due to the injury. This policy can also provide some coverage if you damage someone else’s property in an accidental manner. Homeowner insurance liability coverage protects you for the financial side of these types of events.
Is property insurance different than homeowner insurance?
Yes. As noted above, your overall policy will generally cover your home and the goods that are within it, but it’s going to be made up of a few different types of coverage. One is property insurance and another is homeowner’s insurance. Your homeowner’s policy helps with liability for damage or injury. Standard property insurance isn’t going to give you the same coverage unless you add a rider with an extra premium or a separate liability policy. So property insurance is for the property itself, while homeowner’s insurance adds liability into the equation and gives you a more comprehensive type of coverage.
Are you legally required to have homeowner’s insurance?
The law does not require you to carry home insurance the same way that you are required to have car insurance. If you choose to go without this protection, you can do so. This is true if you own your home, which gives you the right to make these types of decisions. You will simply be responsible for anything that is stolen or damaged.
However, if you do not own your home – if you have a mortgage – then you may be required to get homeowner insurance. The mortgage lender will require it and failure to get a policy will mean that they will not give you the mortgage loan. You generally have to prove that you have insurance if you refinance your house, as well.
The reason that mortgage lenders require insurance is that it helps to protect their investment. They’re giving you a certain amount of money to buy the house, with the idea that they can then reclaim that property if you fail to pay. They need to know that something like a fire or a flood isn’t going to destroy that property or reduce the value, which would make it so that the loan was no longer backed up by a piece of valuable real estate.
Is it possible to lose your coverage?
As long as you make your payments, you won’t lose your policy. If you lapse in those payments, then the policy can be canceled. A lapse could be as short as a single month of missed coverage. Remember to keep a close eye on the terms of your policy. You may have to pay once a year, bi-annually, once every month or in some other fashion. No matter what is required, it’s important to get those payments in on time so that the policy doesn’t lapse and you have the peace of mind that you are covered.
You may also want to check your specific policy to see if there is a grace period. This is often provided so that you can rectify a lapse without having to start the policy all over again. For instance, if you miss a single month’s payment for your home insurance, you may be given the option to get current again by paying twice as much the following month.
Are cracks in the walls covered by home insurance?
Your homeowner policy may provide coverage for the cost of repairing cracks in walls, if the cracks were caused by a loss that you are insured for. An example would be if a pipe breaks and causes a water leak, which then lead to cracks in your walls; your homeowners insurance would likely cover the cost of repairs. Cracks in walls would NOT be covered by your homeowner insurance if the cracks are caused by subsidence or the natural movement and shifting of soil. This is why it’s so important to do a home inspection and to know about any issues that have occurred before and that may occur again.
Is there anything else that your coverage won’t include?
Home insurance may be limited, and it does differ from policy to policy. A standard homeowner’s insurance policy typically excludes coverage for a flood or earthquake, for instance. It may also not cover certain types of theft, such as identity theft or the theft of a valuable collection, such as an art collection or a jewelry collection.
Even if these things are covered, there may be limits to how much you can get for them. For example, you may have homeowner insurance coverage for jewelry up to $5,000. So you can get some compensation if your jewelry is stolen, but you’re not going to get full compensation if you had a jewelry collection that was worth $50,000. It is important to consider these limits when buying a policy, as you may have the option to increase them when you have a valuable asset to protect. Another option for high value items is to schedule the property on your homeowner policy or a separate inland marine policy.
If you have any other questions about home insurance, please do not hesitate to get in touch with us at Rockwall Insurance.