How To Understand Your Home Owner's Insurance

Your home owner's insurance is one of the topics that you think about the least, but could play a big role in your financial future. If you were to suffer a loss, do you know what to expect? There are many factors that make up a home owner's policy. Here are a few things to consider in regards to your home owner's policy.

Determine What Is Covered

With so many insurance providers in the market place, the areas that are covered vary wildly. Do you know exactly what is covered in your insurance policy? Questionable topics are in every home owner's policy. For example, many policies no longer cover mold or mold remediation. While you might be covered the first time a water line breaks, from there you could be on your own. Make sure that any water issues are fixed and will no longer present problems. Another common question area is wildfires. Some policies cover them and some do not. The last thing you want is to be subject to a freak wild fire and not be covered by insurance. Something that catastrophic could cause you to go bankrupt.

Yearly Reviews

Home owner's insurance policies usually come with a lot of technical jargon. If you do not work with insurance frequently, you may not understand what your policy says. For this reason, you should have a yearly review on your home owner's insurance. Call up your insurance agent and set an appointment with them. They will be able to tell you exactly what is covered and what is not. This is a good time to assess your insurance needs and see if you are underinsured. If anything in your life has changed over the course of the year, you may need to tweak a few things. Could you rebuild your house again with the amount you have it insured for? The changing market could require you to up your policy value. What about home owner's association dues? There are a lot of small things that need to be accounted for.

Things That Affect Your Premium

There are many factors that go into the price that you pay for a premium. It is not only dependent on how nice your house is or the square footage. Small things can play a big role in how much you pay as well. Talk to your insurance agent about these things and have them offer suggestions for lowering your premiums. Having working smoke detectors in your house may be required or could lower your payment. Owning a security system is another great way to lower your insurance cost. Depending on your insurance provider, the difference could be as much as 15%. If you also move all of your insurane policies to the same company, you can often get a multi-line discount as a result. Talk to them about moving your car and life insurance and see what you could save.


In today's society of growing litigation, you need to know what your policy says about liability. What would happen if your dog bit a stranger? What if someone slips on the front porch and breaks their neck? Your homeowner's policy will most likely cover these occurences, but you need to make sure before anything happens.