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What is Covered by Homeowners Insurance?

Homeowners insurance plans cover damages resulting from most natural disasters. The coverage exception to most plans is destruction which results from floods, earthquakes, and poor maintenance. For example, homeowners who do not maintain their roofs properly may not be entitled to benefits if the insurance provider determines inadequate maintenance to be the primary cause of damage. Homeowners must purchase separate insurance to cover against these types of disasters.

Homeowners insurance can also serve as liability insurance to protect the homeowner against injuries which occur on the property. These injuries may include those caused by household pets.

Why is Homeowners Insurance Necessary?

Homeowners insurance is so important that most lending institutions will require the homeowner to acquire a certain amount of coverage before issuing a loan for the purchase of the property. Additionally, because the lender has a vested interest in the property and wants to ensure full financial compensation in the event of a disaster, homeowners may find themselves in default of their loan if they fail to carry the level of coverage required by the lender.

Homeowners cannot afford to be without homeowners insurance. The unfortunate event resulting in loss or damage on the property can cause serious financial concerns for the homeowner who does not have homeowners insurance. Although homeowners insurance policy premiums are often high, they pale in comparison to the cost which might be incurred without the benefit of insurance.

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