What is homeowner insurance, and who actually needs it?

[AferAveka]

Not asking this with any kind of bias or sarcasm, I'm just genuinely curious. I know what insurance is, but I've heard people (mostly ""investors"" or people just renting out their apartments) talk about how important homeowner insurance is, specifically.

So, what does it do, and should most people even worry about it? Do you have it?

 

[Graybeard]

First of all; Home Owners is required by any mortgage holder (Banks) it covers general liability, fire, damage peril, theft water and weather damage.. It is based on the replacement value of your home and the area you home is in.

Renter's Insurance is another animal all together --it covers general liability --interior contents only theft and water and weather damage on the inside of the rented premises --the owner covers the exterior. Cost is predicated on the area your apartment/condo/ or home is rented in.

In both cases water damage is not flood damage. Earthquake damage and flood damage are usually additional riders on the policy.

I own my home outright and I pay for it as my home is a six figure "investment" today Home prices are like crazy in the USA right now.

 

[azgold]

Renter's Insurance is another animal all together --it covers general liability --interior contents only theft and water and weather damage on the inside of the rented premises --the owner covers the exterior. Cost is predicated on the area your apartment/condo/ or home is rented in.

Yup. I've had renter's insurance in the past. It was inexpensive but useless when we had a flood from pipes, as the deductible was high (my fault) and came out to almost the cost of replacing things. Landlord paid for repairs.

In both cases water damage is not flood damage. Earthquake damage and flood damage are usually additional riders on the policy.

And friggin' expensive riders, at that. Thousands of dollars for a commercial entity, anyway. We learned that the hard way at my dad's store. The claims adjusters will come to look, might even take pictures before telling you that you'd be covered if the pipes backed up but because it was a flood from blocked city drains in a heavy rain and water came in under doors, etc. you're out of luck. Big difference between water and flood damage in the insurance world. I think in the old days, these things were referred to as acts of God.

 

[Graybeard]

Add those factors in with the ever increasing replacement cost due to today's house prices

The cost of this homeowner's insurance is 0.065% annually of the home's value --it really keeps adding on more cost every year.

 

[AlexzanderWashington]

Think about it - your home is probably one of your most significant investments, right? So why wouldn't you want to protect it? Homeowner's insurance isn't just about covering the basics like fire or theft. It's peace of mind knowing that if something unexpected happens - like a burst pipe or a tree falling on your roof - you're not left footing the bill all on your own. Sure, it's an added expense, but think of it as a safeguard for your hard-earned investment. With so many homeowners insurance providers out there, you can shop around to find the best coverage for your needs. And yeah, I get it, home prices are through the roof these days, but that just makes having solid insurance even more important. Trust me, it's worth it in the long run.