For the most part, homeowner’s insurance is not mandated by the state. However, many mortgage companies do require you to carry some type of coverage. You should understand the basics of standard homeowners coverage in order to make an informed purchase.
What Is Covered by a Standard Homeowner’s Policy
Most homeowner’s policies have six major components. These offer broad protection for a variety of situations.
Temporary shelter coverage pays for you to stay somewhere else temporarily if your home becomes inhabitable by a covered incident. The liability portion of your policy pays costs associated with property-related lawsuits and medical payments coverage pays for medical care if someone is hurt on your property.
Personal property coverage pays for damage to or loss of personal property that is normally kept in the home. Damage to the house itself falls under your dwelling coverage, while outbuildings are covered under a portion of the policy referred to as additional structures.
Special Circumstances Requiring a Custom Policy
Not all houses qualify for a standard policy. If you have a manufactured home, a home with historically significant or unusual features, or one whose value is above a certain threshold, then you may need a specialty policy.
Standard homeowner’s insurance may be required by your mortgage company. These policies provide broad coverage for a variety of situations. While many homes qualify for a standard policy, certain situations demand specialized coverage. It is a good idea to discuss your situation with a knowledgeable agent who can steer you in the right direction.
