What home insurance is
Home owners insurance is just what is sounds like- insurance for your home. It's much like insurance for your car but it covers accidents that happen at home, not on the road.
Do I need home insurance?
Unlike driving a car, you are able to own a home without legally needing insurance. However, chances are you will be required to have home insurance if you are planning on financing your home with a mortgage. Contact your lender for more information.
What home insurance covers
- Damage to the inside and outside of your home
- Damaged or lost personal belongings
- Personal liability for damage or injuries
- Hotel or house rental while your house is undergoing repairs
Types of coverage
- Actual cash value - This type of insurance will cover the cost of the house plus the current value of your belongings.
- Full replacement cost - This covers the full cost of everything from when it was brand new.
- Guaranteed replacement cost - Even if the damage exceeds your coverage limit, the insurance company must fully replace or fix your property at full replacement cost.
- Liability - This covers you if someone is injured on your property.
The current average annual premium of home insurance is $952 or about $80 a month.