Home Insurance  FAQ's

Do I need to have home insurance?

For many of us, a home will be one of, if not the biggest investment made in our lifetime.  Property insurance is an important factor in protecting this investment and is therefore obviously highly recommended.  In addition, if you have a mortgage on this property it is almost certain that your lender will require you to have home insurance to protect their collateral.  In addition to simply covering the structure/building, property insurance policies also cover a wide array of additional important components.  Ask your agent for details about the different levels of protection and optional coverage available.

Are there different types of home insurance?

There are many types of property insurance and each will provide different levels of coverage.  In the most basic of terms, some of the main categories are Renters (HO-4), Condo (HO-6), Home (HO-3) and Dwelling (DP).  Each of these forms are quite unique from one another and offer many customize-able coverages, riders and deductibles.

How much home insurance coverage do I need?

In short – It at least partially depends on the type of policy you require…

HO-3 insurance coverage is heavily dictated by your mortgage company since they are issuing you the loan to purchase the home. Many times your mortgage company will require your coverage to be equal to or greater than the amount of the loan. You also want to ensure that your home is covered against a total loss. For example, in the event of a fire and the property needing to be rebuilt from the ground up, you would need enough coverage for materials and labor to rebuild a house of similar size, features, etc.

HO-6 insurance coverage can also be dictated by your mortgage company. Lenders typically require 100% replacement cost or coverage up to a certain percentage of the loan amount. Condo insurance can be a bit more complicated than other forms of property insurance, as you are generally working with 2 different policies, i.e. 1.) your own HO-6 individual policy and 2.) the Condo Master Policy that is shared by all of the unit-owners/condo association.  These two policies should always be complimentary.  Therefore it is a good idea to review your Master Policy prior to obtaining your individual policy to ensure that you are not over-insuring or leaving any gaps in coverage.

HO-4 insurance primarily covers the personal property you own within your apartment unit, such as your clothing, furniture, electronics, etc.  The amount of coverage needed varies depending on the type and quantity of possessions that you own.  It is easy to take for granted the amount of “stuff” we accumulate and in turn the amount of money it would take to replace it all in the event of a total loss, such as an apartment fire.  Long story short, even if you don’t own the building – you still have a lot to lose.

**In closing – Like any other insurance product, your Home policy is not a one size fits all purchase.  Everyone has different needs and circumstances and it is always a good idea to remain educated around your options and requirements and to discuss those unique scenarios with your agent.

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