Homeowner’s Insurance: Talk the Talk

So, you’re looking to buy a new home? If so, one of your top priorities will be to make sure it’s protected, or insured. But the world of insurance – especially homeowner’s insurance – is confusing and vast. So as you shop around for the best insurance plan out there, here are the types of home insurance coverage that you will be looking at. Each type of coverage depends on the type of home you live in!

Standard home insurance

If you own a home, you will likely have both property and liability covered on your insurance plan. Other perils that threaten your home, like hurricanes and lightning, are also commonly covered.

“Dwelling” insurance

This is a notch down from basic home insurance, in that only the costs of property damage and/or loss are covered in the policy. However, in the event of most natural disasters, your home is still protected.

Condominium insurance

With this kind of insurance, only the “contents” of your home can be insured, however if you are financially responsible for parts of the dwelling, you can get broader coverage. Consider condominium insurance as a more limited type of dwelling insurance.

Rental home insurance

You can, indeed, buy insurance for a home you are renting through renter’s insurance.

Farm home insurance

If you live on a ranch or a farm, you likely won’t be able to get the basic homeowner’s insurance. But you would want more than that anyways. Farm owner’s insurance is much sturdier than plain homeowner’s insurance. Your farm or ranch home is protected from the costs of damage or loss that result from natural perils like tornados and you will have both liability and property coverage! On top of that, if your property has commercial value, your farm owner’s insurance can handle that as well.

So, now that you are able to talk the talk a bit about homeowner’s insurance, what do you do about it? There are two ways to buy insurance – on the voluntary market and on the shared market. In a voluntary market, you can freely shop around for a home insurance plan that best suits you. However, if you don’t qualify for homeowner’s insurance – for whatever reason – you can still find insurance in the shared market. Investigate your state’s laws in order to find out what your options are in the shared market.

Remember, however, that certain natural disasters like earthquakes and floods are not typically covered in most homeowner’s insurance policies. You must find this kind of specialized, albeit necessary (in some areas), coverage separately.

So, determining what kind of home you have is the easy part! Now you know what kind of coverage you can expect to get and begin comparing different policies. Good luck! Just remember to watch out for bargains that sound too good to be true or coverage that doesn’t cover a whole lot.