Mortgage Dictionary -> Home Insurance
Car insurance is a mandatory thing in both Canada and the United States, which explains why most, if not all, drivers have it. However, home insurance is not mandatory-unless, of course, you have a mortgage and yet it's every bit as important as car insurance. If a storm were to destroy your home tomorrow, and you didn't have home insurance of any kind, you'd be forced to pay for a rebuilding of your house out of pocket. That's just one reason why to get home insurance, and as you educate yourself more on it, you'll probably see other reasons, too.
What is Home Insurance
Home insurance is a type of insurance that covers property. It can cover property such as farms, homes, townhouses and condos, among other things. Home insurance may cover the structure of the house, or may cover all of its contents, depending on the policy. Some home insurance will not cover damage caused by hurricanes, particularly if the property is in Florida or another hurricane-prone state. In addition, home insurance has many different policy options depending on the house itself and what level of coverage the homeowner wants. It is available in both Canada and the United States.
Home insurance also typically covers accidents that happen on the property itself, such as a neighbor who falls on your property and is hurt. If a claim is filed through the insurance company, it will take care of the costs of the person's injury.
When is Home Insurance Voided?
Unfortunately, like many other kinds of insurance, there are instances where home insurance will not cover the damage to the home. One such instance is an "Act of God" - a natural event that has occurred and has caused damage to the home. Other instances include damage caused by earthquakes, floods and war.
How Expensive is Home Insurance?
Many homeowners are scared off by the "high" price of home insurance. In reality, this price is a small one to pay for the amount of piece of mind and protection it provides the homeowner. Most homeowners insurance costs between $600 and $1800 a year. Spread out over monthly payments, this is a reasonable amount of money to spend for coverage that will take care of your house in the worst case scenario.