In purchasing a home, you have made a significant investment in your future. Home insurance gives you the means to protect that investment. While not required in many states, homeowners insurance is a common lending condition for mortgages, meaning your lender may require that you have coverage. It is smart to have an insurance policy in place for your home, regardless of lender requirements, to protect you financially in case of emergency. Here's what you need to know to get the coverage the best suits your needs and budget. 

Components of Homeowners Insurance 

While specific coverage options can vary among insurers, some components are virtually universal: 

• Real Property Coverage – This is the component your lender is most likely to require, as it pertains to the house itself. You'll likely need, at a minimum, a policy limit sufficient to cover the cost of replacing the entire structure if it is destroyed. This only refers to the home itself, not any of its contents, which fall under personal property coverage.
• Liability Coverage – This portion of your policy protects you if someone sues you after being injured on your property. Your policy can come into play to cover the person's medical expenses, as well as any settlement you might be court-ordered to pay. This can save you from having to sell your home or use your retirement savings to cover the costs without insurance. Many lenders will require liability coverage in addition to property coverage.
• Personal Property Coverage – Lenders likely won't require you to have this aspect of coverage, as it applies to your personal belongings within the home. This includes appliances, furniture, decor, clothing, dishware, and other typical household items. High-value items, like jewelry and art, may require separate coverage.

For property and liability coverage, your lender will likely set a minimum amount that your policy must cover as a condition of servicing your mortgage. However, if you can reasonably afford to increase your coverage, particularly in the liability area, it is smart to do so. The added protection will give you greater comfort and peace of mind while securing your financial future, so it is in your best interest to maximize your coverage as much as possible. 

Trust Onstad's Insurance Agency for Your Home Insurance Needs 

Reach out to our team today to learn more about our services and how we can find you the perfect homeowners insurance policy to satisfy your lender and secure your future. Call 925-866-1444 to get started.