Homeowner Insurance: What Is It?

Your home may be the most expensive asset you own. Even though your mortgage company probably requires that you carry insurance its always a good idea to have a good policy that fits your needs.  The standard homeowners policy protects more than just your home, it protects your stuff and you.  If you get sued they litigate on your behalf.  Remember an insurance company will only pay you up to the limits stated in their contract. In addition an insurance company will replace your personal property (clothes, shoes, furniture and appliances).  It may also pay you to live elsewhere if you can't live in your home. It will pay for you to send your guests to the ER if they get injured at your wild party.    All this typically for less than $1,000 per year.  Usually these policies have deductibles (i.e. 250, 500 or 1000).  The higher your deductible the lower your premium because you're accepting more of the risk.  How much of the risk can you afford to shoulder if something happens? Your choice.  I don't recommend having low deductibles for reasons I'll talk about later.  A good homeowners insurance policy comes with a knowledgeable agent and staff and it's an "all perils" policy with "replacement cost" for your personal property.  More about those terms later.