Home Insurance: Protecting Your Biggest Investment

Your home is likely your most valuable asset. Home insurance provides financial protection against damage to your property and belongings, as well as liability coverage for accidents that occur on your property.

What Home Insurance Covers — Standard home insurance covers damage from fire, storms, theft, and vandalism. It also covers personal belongings inside your home and provides liability protection if someone is injured on your property.

Types of Home Insurance Policies — Building insurance covers the physical structure, contents insurance covers your belongings, and comprehensive policies cover both. Consider which combination best suits your needs.

Determining Coverage Amount — Your coverage should be based on the rebuilding cost of your home, not its market value. The rebuilding cost includes materials, labor, and professional fees required to rebuild your home from scratch.

Common Exclusions — Most home insurance policies don't cover flood damage, earthquake damage, normal wear and tear, pest infestations, or damage from poor maintenance. You may need separate policies for natural disasters.

Tips for Lower Premiums — Install security systems, smoke detectors, and fire extinguishers. Bundle your home and auto insurance with the same provider. Maintain your property well and increase your deductible if you can afford higher out-of-pocket costs.