Understanding the Basics of Homeowners Insurance: What Every Homeowner Should Know

Homeowners insurance safeguards your property, belongings, and finances against unexpected events like fire, theft, and certain natural disasters. Here is a quick primer on the basics of home insurance: 

What is Homeowners Insurance? 

This insurance provides financial protection for your home and belongings as well as liability protection if someone is injured on your property. The best policies are tailored to your specific needs. 

Key Coverages: 

Dwelling Coverage: Dwelling coverage is insurance for the structure of your home from perils like fire, storm, wind, vandalism, theft, among others.    

Personal Property: Sometimes also called contents insurance, this covers belongings inside and outside your home, like furniture, clothing, and electronics. 

Liability Protection: Liability insurance pays medical and legal expenses if someone is injured on your property. 

Additional Living Expenses: If your home becomes uninhabitable due to a covered loss, additional living expenses will cover the cost for you to live somewhere else, like a hotel. 

What’s Covered: Standard policies cover perils such as fire, theft, water damage (excluding floods), and weather-related incidents like windstorms. Separate policies are needed for floods. Beware—not all policies are the same. It is important to review your policy for the list of covered perils.  

Policy Limits: The policy limits shown on your policy are the maximum amount the carrier will pay you in the event of a covered claim.   

Deductibles: The deductible is the amount that you are willing to pay in the event of a covered claim. For example, if your claim is $5000 and your deductible is $1000, the carrier will pay you $4000.  It is important to choose a deductible that you can afford to pay should a claim occur.  

Additional Coverage Options: Consider flood insurance, additional liability coverage (called umbrella liability), earthquake endorsements, or special coverage for high-value items, like jewelry or art. 

Review Regularly: We recommend reviewing with us every one to three years to ensure that your policy reflects the changes in your life, like renovations, new drivers, or new purchases. 

Insurance is complicated! Let us simplify the process by having a conversation to understand your needs and risk profile. 

Marlene Levengood, is an Account Manager at Knight Insurance Group, and has been an insurance industry veteran for over 35 years.

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