Getting Your Home Insured

Most mortgages require that a borrower get home insurance for the property to protect the company's interests.  Many of the companies simply roll the insurance premium payments into the monthly mortgage payment to insure that the policy remains up to date as long as the mortgage is in place.

Even though the mortgage company may pay for the policy the borrower will still have to find the right insurance coverage and also sign up for that insurance policy before the mortgage company will begin making the payments.

There are typically two parts to a home insurance policy - the property protection and the liability protection.  It is up to each home owner to put limits on the different protections.  These limits will determine the premium payments required to keep the policy up to date.

The property protection covers everything from the dwelling itself to the personal property being held in the dwelling.  Some home insurance policies may also cover other structures on the property (like a shed or detached garage).  It is also possible to include an amount of protection that will cover the loss of use of the property.

Property protection can be paid at a replacement value or at a depreciated value.  The replacement value will pay the amount it would currently cost to purchase the same (or similar item) - or it will pay to replace the item that is lost.  Depreciated value pays the policy holder the amount that the item originally cost minus the depreciated value.

Liability protection covers the homeowner if some one is injured on the premises.  It can provide personal liability against any lawsuits that might occur from the accident and it may also provide medical coverage to pay for any medical bills received from the accident.

It is wise for new home owners to purchase home insurance that includes both property protection and liability protection.  The amount of coverage, the size of the deductible and other factors will likely change from home to home and from year to year for each individual policy holder.