Difference Between Insurance and Premium
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What is Homeowners Insurance?

Homeowners insurance covers your house and personal items in the event of a covered loss. In general, homeowners insurance compensates for damages and/or losses caused by theft, fire, extreme weather, and injuries sustained on your property.

Accidents happen and the weather’s outside of our control. Homeowners insurance is one way to help you prepare. If you own a home and value the things inside, make sure you’re protected with homeowners insurance. Some policies can also cover things like:

  • A hotel if your home is unlivable
  • Roof repair
  • Personal property replacement
  • Drying out services, and more

How Does Homeowners Insurance Work?

Homeowners insurance is, in general, a contract between you and your insurance carrier. This is how the contract works:

  1. You pay a premium (money) to your insurance company
  2. In return, the insurance company promises to cover future damages (per the contract) to your home if a covered loss happens



Every house is unique. Your homes insurance premium, or the amount you pay, is determined by a variety of variables, including;

  • Location
  • Materials used to build the home including foundation, walls, and roof
  • Personal items in the home
  • How the home is used (rental, business, etc.)
  • Credit score, and other factors

As a result, you pay your charge and have a covered loss. This is when your insurance company enters the picture. Assume that your roof has been damaged by a hailstorm. Generally speaking,

  1. You’d file a claim with your insurance company
  2. The insurance company would assess the damage and verify it’s a covered loss per the contract
  3. If it’s covered, they would pay for the damage minus any¬†deductible¬†(the amount you owe)

What Does Homeowners Insurance Cover?

  • Your belongings
  • Your home and any other structures, like a shed
  • Fire, water, and weather damage
  • Damage to someone else’s property
  • Medical bills if someone is hurt at your home
  • A place to stay if your home suffers damage that makes it unlivable

SOURCE: Keeoko.com


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