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Homeowners Insurance

Homeowners insurance is a type of protection that covers losses associated with home ownership, especially to losses to the home itself, losses to the contents within such as personal possessions, losses to the use of the home, and accidents and personal injury that may occur within the home or on the property in which the home is attached.

The homeowners insurance policy covers losses due to fire, wind, rain, hail, smoke damage, theft, vandalism, falling objects such as trees, aircraft, and ice, and other specified events.

Usually, the policy does not include damage due to natural disasters such as earthquakes, floods, landslides, hurricanes, tornados, and other so-called "Acts of God", although additional insurances can be purchased to cover such possibilities.

A standard homeowner policy comes in a package, covering legal responsibility for any injury that occurs on the property, whether caused by a family member or an injury caused by a pet, such as a dog bite. It also covers damage to the insured property but it will not cover damage that is caused by neglect and/or poor maintenance.

The cost of homeowners insurance depends on the type of policy needed to replace the home, it's contents, or other perceived needs of the insured. If there are items that the insured wants covered that are not covered by the standard policy, additional riders are attached to the policy for those items that are added.

When you purchase a home, most lender will require a borrower to purchase homeowners insurance as a condition of the loan to protect the lender if a disaster, such as a fire, destroys the home. Anyone with an interest in the home should be listed as being insured under the policy.

In certain cases, if the value of the property is greater than the amount of the mortgage balance, the lender might waive the need for the borrower to purchase homeowners insurance, as long as the lender can recoup the full balance of the loan if it has to foreclose on the property or if the building on the property is totally destroyed by a natural or man made disaster.

The amount of the premium paid by the insured depends on several factors such as the condition of the property at the time the policy is written, whether the property is in a known disaster prone area, whether there are fire alarms, sprinklers, and smoke detectors installed in the property, escape routes, the age of the property, and the property's use.

It is important to read your homeowners insurance policy, and to ask questions if there are items that you don't understand about it. A homeowners insurance policy should be updated periodically to make sure that it conforms with existing and changing values due to economic forces such as inflation or recession.

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