What is home insurance and what does it cover?

Home insurance is a common term and need, but until you become a homeowner, you may not understand what home insurance actually covers or is needed for. At Holly McMillin Insurance, we love to explain the basics to our policy holders so they fully understand what it’s for and how it can be a critical resource in times of theft, storm damage, accidents, fire or other emergencies.

What is home insurance?

Home insurance is a form of property insurance that provides protection coverage over loss and damage to an individual’s personal residence. This includes not only the home or property itself, but furnishings and assets as well. Personal liability coverage is also included on the home insurance policy – which protects the homeowner’s assets in the event of an accident. 

What is personal liability coverage in home insurance? home insurance coverage

Personal liability coverage on a home insurance policy defends the homeowner and their property. For example, if a guest visiting the home were to accidentally fall down the stairs, personal liability coverage on a plan can help pay for medical expenses so the homeowner doesn’t have to cover these out-of-pocket. 

If an accident of any type occurs on a homeowner’s property, a claim must be made to the insurance company right away. This could be coverage assistance for medical bills for visitor accidents, house fires, vandalization, and more. A submitted claim will typically be in the form of a legal document including losses, damaged articles, as well as pictures and videos if necessary. Home insurance is not required by law, but most banks require it with a mortgage. Furthermore, it can protect the homeowner from immense loss sustained to their property or assets. 

What is included in most home insurance policies?

Home insurance policies usually include coverage for interior damage, exterior damage, damage to personal assets, and any injuries sustained while on the property during the time of the incident. Each  policy will include a liability limit to determine the amount of coverage needed in the event of an incident. The team at Holly McMillin insurance group works with homeowners to determine the appropriate limit for your liability coverage, as well as determining a plan to protect your home as suited. 

Examples of home or property damage:

  • Interior damage: clothing, furniture, appliances, water damage 
  • Exterior damage: lightning, fire, cracks in foundation
  • Theft, vandalization, burglary 
  • Natural disasters: hurricanes, lighting, hail

What is not covered on a basic home policy?

Most home insurance policies do not include coverage for flood or earthquake damage, rodent or termite damage, or damage from rust or mold. It should be noted that a separate policy would be encouraged to protect high-dollar assets such as fine art, jewelry, and antiques. Also, if the homeowner lives in an area more susceptible to natural disasters such as hurricanes or tornadoes, more coverage may be needed. Holly McMillin Insurance and team can assist in deciding what additional coverage options may be needed, particularly in the states of Kentucky, Florida and Virginia.

Why does a homeowner need home insurance?

Having insurance provides protection coverage for loss and damage sustained to the property during incidents such as theft, storms, and fires. Home insurance helps protect valuable assets damaged in such situations. For example, if there is a shed or fence on the property and it gets vandalized or damaged, the policy can help pay for repairs. If the homeowner cannot stay at their residence because the home has suffered too much damage, there may be a clause to provide financial assistance for temporary living costs. Obtaining insurance doesn’t guarantee that an accident won’t occur on the property, but it does guarantee a financial security blanket in the unexpected event of an accident.

What is the difference between home insurance and home warranty or mortgage insurance?

Home warranty covers maintenance issues and normal depletion that occurs over time. This may include plumbing, electrical work, or HVAC. In addition, home warranty covers repairs or replacements for appliances, water heater, and pools. Home warranty contracts usually expire within a time frame and having a home warranty is not required to buy a home.

Mortgage insurance is required by most banks or mortgage companies if there is a downpayment that is less than 20%. If the homebuyer takes out an FHA loan to purchase the home, the bank or mortgage company will require mortgage insurance. This type of insurance protects the lender if the homebuyer fails to make payments. Homeowner insurance protects the homebuyer and mortgage insurance protects the lender. 

Holly McMillin and the team specialize in creating personalized insurance coverage for those who own property in Florida, Kentucky, and Virgina. The team works with homeowners to create an insurance plan to protect all assets of the homeowner in the unforeseen event of property damage or loss. Click here to get a free quote!