Home Owner Insurance - A Basic Introduction

For most American families, their home is their largest investment. And that investment needs to be protected with insurance. You do not want to be lacking protection by purchasing inadequate coverage, nor do you want to waste money by purchasing excessive amounts of insurance.

As the weather of the last two years has made painfully clear, disasters can occur. Hurricanes, earthquakes, floods, and fires are all too prevalent in modern society. Not only are natural disasters a significant threat, man made accidents can occur as well. Your home owner insurance policy should protect you from financial ruin should one of these disasters strike. However, not all policies are created equal. One type of disaster that is covered by one policy may not be covered by another. It is important to know what is and is not included in your home owner insurance coverage.

Just about every home insurance policy excludes several items. These are floods, earthquakes, and war. Let's assume an invading army decides to drive a tank through your living room. While the U.S. Military will likely be involved in putting a stop to it, from a replacement point of view, you are on your own. Your insurance company is not liable to pay, as acts of war are excluded in most insurance policies. It is interesting to note that most insurance companies define a nuclear explosion from any cause as an act of war. So if the local nuclear power generating plant blows up for any reason, even if not terrorist related according to the FBI, it will be considered an act of war by your insurance company and they will not be liable to pay for any damages to your property.

The property owner should also be aware that typically floods and earthquakes are never covered in the standard insurance policy. Insurance for these two disasters can be purchase as a rider, but there will be an additional cost. In some cases, this added cost is substantial. It is up to the buyer to determine if the cost is worth the benefit. In most cases, it is.

Now more than ever, a quality home owner insurance policy is an absolute necessity. The financial risk of going without insurance protection is simply too much to bear. Should a disaster strike, either natural or man-made, having it could mean the difference between financial ruin or surviving it unscathed. If you have a home, you simply need home owner insurance.

Greg Roy is a widely recognized construction and real estate expert who specializes in environmentally friendly homes. To learn more about Home Owner Insurance, please visit his website at homeowner.insurance-deal-s.com

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