What is Homeowners Insurance?

Homeowners insurance, also commonly called hazard insurance, is the type of insurance that provides financial protection against disasters. A standard policy will cover loss of ones home, its contents, loss of its use (additional living expenses), or loss of other personal possessions of the homeowner, as well as liability insurance for accidents that may happen at the home.

Typical insurance policies will cover damage caused by most disasters. Disasters caused by floods, "Acts of God", earthquakes, poor maintenance or war are typically not covered. However, you can purchase separate policies for flood and earthquake coverage.

A Homeowners policy premium will vary depending on the cost to replace the house, the outstanding balance on any loans as well as any additional riders. These riders are a list of additional items to be insured, including things like jewelry, engagement ring, valuable paintings or antique furniture and collectibles.

It is very important that you review and understand the liability portion of your insurance policy. As a property owner you are legally responsible for any injuries and property damage you or members of your family (including pets) cause to other people. As a result you can expect your premiums to adjust with the risk of injury to your family of visitors. Things like adding a trampoline, a backyard pool or the kind of dog one acquires can have a significant impact on your insurance premiums.

Aside: According to a study from the Centers for Disease Control and Prevention study, Pit bull, Rottweiler, Chow Chow, Doberman Pinscher, Akita and Staffordshire Bull Terrier purebreds are responsible for the greatest number of dog-bite-related fatalities.