Homeowners Insurance Questions
Mortgage Insurance: Who decides—the mortgage company or me?
You decide on the type of insurance to cover your home. The mortgage company will require that their investment be protected by insurance.
In most cases, they will collect a certain amount from you each month, which is then placed in escrow and withdrawn only to pay for insurance and taxes. However, the policy is yours and you may select the policy you feel provides the best coverage and protection for the value.
What is covered in a homeowners insurance policy?
With approximately 900 insurance companies writing Property / Casualty policies in the United States, defining the exact coverage provided in a homeowners policy is difficult, if not impossible. However, about 80% of homeowner policies are derived from a standard form and all homeowner policies cover two key areas: property and liability.
Property insurance protects your structures and possessions.
Personal liability covers any money you’re legally obligated to pay to another person for actions caused by you, your family, or your property – this may also include medical payments for injuries caused by you or your family.
Are natural disasters (like floods and earthquakes) covered?
Most natural disasters are covered; however, flood and earthquake damage are not covered by standard policies.
Both of these perils are more common than most people realize - our representatives can advise you on commonly excluded conditions like earthquakes and floods.
What exclusions I should know about?
Common exclusions defined in your policy can include damage due to neglect, intentional loss, “earth movement,” power failure, and damage done by war. For instance, if you fail to take care of your property (e.g., you do not repair your leaking roof), you may not be covered for any resulting damage.
Another common exclusion which can be expensive is the Ordinance or Law exclusion. This pertains to building codes established by governmental bodies which increase the cost of rebuilding/repairing. For example, when replacing damaged property, you may discover that current ordinances require you to use higher grade and more expensive materials than those you are replacing; these new materials may not be fully covered.
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