Homeowners insurance is not required by law but mortgage lenders will require you to take out a policy before extending you a home loan. Homeowners insurance provides protection for your home and other assets in the event of a disaster or lawsuit. It covers your home, personal property, and combined assets if your home is damaged. It also covers you if your home is burglarized or you find yourself in a lawsuit and are held liable for an accident. You will find each of the coverages and limits on your policy declarations page.

Here is what a typical policy should cover:

• Dwelling coverage includes the structure of your home and any built-in appliances.
• Other structure coverage includes detached structures such as a barn, a detached garage, etc.
• Personal property are your personal belongings both inside and outside the home.
• Loss of use will pay for living expenses while your home is being repaired.
• Personal liability will pay for any medical bills you may be held liable for and/or personal property damage to someone else.
• Medical payments will be covered if a guest is injured in your home. This includes medical bills regardless of fault.
• Lightning and house fires.

Although homeowners’ insurance can protect your home from lightning strikes, house fires, and theft, it does not include maintenance repairs, water damage or mold. You can add equipment breakdown coverage to your policy but this will only protect your appliances from risks that are not covered, like improper installation and mechanical or electrical breakdowns and not maintenance issues.

What is not covered under a homeowners insurance policy?

• Flooding from sewer backups
• Earthquake damage
• General wear and tear or maintenance issues
• Roof leaks
• Pest infestations
• Mold

A home warranty can cover the gaps in maintenance as it is designed to help alleviate the stress of typical home maintenance issues. Please see my home warranty page for more information on home warranties and how they help protect your home. Most home warranties can be pricey and have an annual fee but they can help if you have a water heater breakdown or refrigerator break down and are not prepared. Many new appliances come with their own warranties however they usually only last one to three years.