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Homeowner and Renters Insurance

How does a homeowner's insurance policy work? What does it actually cover? How can you get the best possible price? And should you file a claim? We've got answers to all your most pressing questions about insuring your home or condo, plus tips on renter's insurance.

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What you need to know about homeowners insurance

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Frequently Asked Questions
  • Is renters insurance required?

    Renters insurance is often required by your landlord as a condition of renting the property. But even if it’s not, it’s usually a good idea to have. It’s affordable—around $15 per month, on average—and it covers your personal belongings from events like fire or theft. It can also protect you if someone gets hurt in your home, by covering their medical costs and your legal expenses.

  • Is homeowners insurance required?

    If you have a mortgage, the lender will require you to have home insurance, often for at least 80% of the home’s replacement cost. But you can decide to increase your coverage and adjust your deductible. Homeowners insurance covers your home, personal belongings, and other structures; provides liability protection; and may pay for alternate accommodation if your home becomes uninhabitable. 

  • What is an all-risk insurance policy?

    An all-risk policy doesn’t specify covered perils. In other words, you’re protected from damage to your personal belongings and property from any source unless it’s specifically excluded in the policy. These policies are also known as “open perils” policies, “comprehensive form” insurance, and HO-5 policies.  

  • What does homeowners insurance cover?

    Homeowners insurance covers your dwelling, additional structures (such as a detached garage or shed), your personal belongings, additional living expenses (like if you can’t occupy your home due to a covered loss), and provides liability protection (in case you’re responsible for injuring someone or damaging their property at your house). You can adjust these coverages by adding endorsements.

  • What is an escrow account?

    If you have a homeowners insurance policy, part of your monthly payment might go towards property taxes and insurance. These payments are held in what’s called an escrow account until they’re due, which is typically on an annual basis. In this way, lenders know that homeowners are budgeting for those expenses—otherwise, the lender might be at risk.

  • What is a homeowners insurance declaration page?

    A homeowners insurance declaration page, or “dec” page, outlines your coverage. It typically includes: the different types of coverage you have, your policy limits, your deductible, your premium, the location of the insured property, any riders and discounts, the policy number, the policy’s term, and who’s insured.

  • What’s the difference between replacement cost and actual cash value?

    Replacement cost value (RCV) and actual cash value (ACV) are two insurance industry terms that determine how much you’ll be paid for a covered claim. The difference is that ACV considers depreciation. For instance, if a 5-year-old TV was destroyed and insured for ACV, you’d be paid the value of that 5-year-old TV now (minus the deductible). RCV would pay to replace it with a similar new model.

Key Terms

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