Homeowners Insurance: Everything You Need to Know Before You Buy

Buying a home is a big deal and a significant investment. For most of us, our house is our biggest expense.

What Is Homeowners Insurance?

Homeowner Insurance is an insurance policy that covers losses and damages to your home and assets in the house.


– Damages to the exterior of a home – Damages to the interior of a home – Loss or damage to personal assets – Injuries that occur on the property


In addition to these coverages, if you live in an area prone to natural disasters, also known in the insurance business as “Acts of God,” you may also have policy coverage for disasters such as:


Actual Cash Value With actual cash value coverage, you’d be covered for the cost of your home and belonging after accounting for depreciation

Three Types of Homeowners Insurance

Replacement Cost Replacement value policies are the same as actual cash value except it does not take depreciation into account.

Guaranteed (or extended) Replacement Cost/Value  This type of coverage will allow you to receive the total cost of repairing or rebuilding your home, even if it’s more than your policy limit.


– Where you live – price of your home  – The amount of coverage – Your home’s age  – Home security  – Your credit history – Additional types of coverage – Your deductible

Cost Variables

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