What is homeowners insurance?
Homeowners insurance covers damage to your home, property, personal belongings, and other assets in your home. Your homeowners insurance policy may also cover living expenses above your normal cost of living if a covered loss forces you to stay elsewhere while your home is being repaired or rebuilt. It may also provide coverage for accidents or injuries that occur in your home or on your property. A homeowners policy covers injuries you may unintentionally cause to others away from your property for which you may be liable.
How does homeowners insurance work?
Homeowners insurance coverage may provide you with protection if the unexpected happens to your home or property. Your home insurance company provides you with coverage for your home, belongings, and the other structures on your property. If a sudden and accidental loss occurs, you can file a claim with your insurance company. You will potentially receive payment for covered losses, minus any home insurance deductible, up to your policy's coverage limit.
Is homeowners insurance required?
Unlike car insurance, home insurance isn't mandated by law. However, if you are financing your home, mortgage lenders have a vested interest in it. They will typically require you to have a homeowners insurance policy in place. Even if you paid off your mortgage, your home is arguably one of your most valuable assets and you will want to protect it. Because homeowners insurance not only protects your home and property but may also cover you if someone sues you for accidental injuries, you might consider it a must-have.
What are the different homeowners insurance coverages?
Homeowners insurance typically covers your dwelling, other structures on your property, personal property, personal liability, medical payments to others, and loss of use costs. Payment for damages depends on if a covered peril caused the loss and the homeowners insurance coverage limits on your policy.
Learn more about what homeowners insurance covers.
FAQs about homeowners insurance
Is home insurance tax deductible?
Homeowners insurance is generally not tax-deductible. But some exceptions may warrant a possible home insurance tax deduction, including if you have a home-based business. Consult a tax professional for more details. Properties with a home-based business might not be eligible. However, some insurance carriers might accept your business if there isn’t any foot traffic on the premises, including employees and clients.
Learn more about if homeowners insurance is tax deductible.
How long are home insurance policies in effect?
Most policies are for 12 months and renew annually. Learn more about policy lengths and how homeowners insurance is paid.
Do I need homeowners insurance for a rental property?
If you have rental properties and tenants, you need landlord insurance to safeguard your property and provide liability coverage like any other home insurance policy.