Being a first-time homeowner is one of the most stressful events in life. Even moving is considered as stressful as a divorce, job loss, and even death of a loved one. Combine the two and it can feel like a never-ending process. There are so many moving pieces in becoming a homeowner literally and figuratively. Knowing all the paperwork you need and what you need to qualify is an overwhelming task.
One of the requirements of most mortgage companies is that you, the homeowner, have homeowner’s insurance. This insurance is not for your enjoyment. However, It is a necessity and more importantly, it is for your financial protection and well-being in what is often considered your largest personal investment. Your home. But, where do you get started? Luckily, you’ve landed in the right place on the internet and we are ready to help guide you through this process.
So, what is a homeowner’s insurance policy?
A standard policy insures that your home and all your belongings in that home are protected. This protection is for if your home is broken in to or damaged. This insurance will also cover you if you are forced to move out of your home due to those extenuating circumstances. Lastly, should anyone get hurt on your property and they file a claim against you, basically suing you, you will be able to rely on your homeowner’s insurance to cover that loss.
For example, if your elderly friend is visiting you for lunch and they accidentally trip over your first step that only stands a few inches from the ground and they need to go to see a doctor, they can essentially send your homeowner’s insurance that bill. They are suing you for whatever pain or surgery comes as a result of that accidental fall.
What types of homeowner’s insurance is there?
Homeowner’s insurance will cover the structure of your home, any fixtures, attached structures like your garage, and built-in appliances. Most homeowner’s insurance policies also cover your belongings in the home, in the instance that they are damaged due to an accident or unforeseen circumstance like an accidental grease fire or stolen. As with any insurance, there are a lot of different policies that can be added additionally to cover your individual needs. For example, someone living in Kansas may not need earthquake insurance, like someone in California should invest in that type of policy. Here are the different policies and a brief description of each pulled directly from the NAIC, the National Association for Insurance Commissioners, in no specific order.
Different policies for different homeowners:
- Dwelling: Pays for damage to the house and attached structures.
- Other Structures: Pays for damage to structures not attached to the house (fences, sheds).
- Personal Property: Pays the value of damaged or lost possessions (furniture, electronics, clothing).
- Loss of Use: Pays some additional living expenses during the home repair.
- Personal Liability: Covers financial losses from property damage and personal injuries to others, if found legally responsible.
- Medical Payments: Pays medical bills for people hurt on the homeowner’s property or by the homeowner’s pets.
- Flood Insurance: Separate policy that pays for flood-related damages to the house and contents.
- Earthquake Insurance: An add-on or separate policy that pays for damages to the house and other covered items caused by an earthquake.
- Water Backup of Sewer: Pays for losses to the house from a sewer or drain backup.
- Personal Umbrella Liability: Pays for losses from bodily injury, property damage, and personal injury to others beyond the policy limits.
Your ONIT insurance broker can help guide you through all of this. We will let you know what we think will be the best due to any of your circumstances and your location.
How does a homeowner’s insurance claim work?
It is a question that we hope you never have to actually learn the answer to. Because that typically means something bad happened. After a disaster or theft, you want to get your life back to normal. You want to get your home to feel like home again. As an insurance broker, we want that for you too! So, in order to get your claims process rolling, you will need to call your insurance company and file a claim.
What happens after you file a claim?
Generally, one of their local insurance adjusters will come out, inspect and assess the damage and offer you a certain sum of money to cover the cost of the repair, based on what is set within your policy. You can either accept the claim or request another opinion from the same insurance company. Most claims are to be filed within a year of the date that it happened. However, you will want to check with your state’s laws and what applies to the area that you call home. If say, the problem is fixed at first and then another problem persists from that, you should be able to call and refile the claim and start that process over again in order to receive an additional payment from the insurer.