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Homeowners Insurance

If you own a home, it likely represents one of the largest financial investments that you will ever make. Since so much of your net worth is tied up in your home, it is important that you do everything in your power to protect this asset. Homeowners insurance is one of the most common and effective ways to provide this protection. This article will help you understand the basics of home insurance.

Homeowners insurance protects both the owner and lienholder of a home in the event of a covered loss. Covered losses might result from natural disasters, malfunctions within the home that result in damage or even liability claims that stem from an accident or injury on the property. Since these types of claims can result in catastrophic financial losses, just about anyone who owns a home should purchase this type of insurance. In fact, many banks and home lenders will require borrowers to be properly insured.

If your home is damaged as the result of a covered event, you will file a claim for financial compensation through your insurance provider. This process is often initiated by a local insurance agent. A claims adjuster may also be called on to assess the damage. While you may have some discretion in how any work is performed, the lienholder will typically require that the repairs also meet their standards. When you have a covered claim, you will still typically incur some out-of-pocket expense in the form of a deductible.

Home insurance policies vary greatly in the types of coverage they provide. If you live in an area that is prone to earthquakes or flooding, for instance, you may need to purchase a special type of policy. Be sure to read your policy carefully to understand any events that might be excluded.

When a home is damaged, it can be an emotionally debilitating experience. If the right homeowners policy is purchased, it need not be financially devastating. A good policy can help to pay for damages in a manner that ensures the work is done correctly and expediently so you can be back to enjoying your home in no time.