Homeowner’s Insurance FAQ
The new Discover Insurance Center doesn’t just offer insurance, it offers insurance education too. Get the answers to some of the most commonly asked insurance questions, so you can be empowered with information.
- What is in a standard homeowner’s insurance policy?
- A standard policy offers coverage for the structure of a home, personal possessions, liability protection and living expenses if you cannot live in your home because of an insured accident or disaster. There are a few things it does not cover, such as damage caused by floods and earthquakes. Those are covered by insurance policies that must be purchased separately.
- Are there different types of policies?
- Yes. Single-family home owners, renters, condominium owners, and farm owners would need different types of policies. Policies also vary based on what specific kinds of incidents are covered.
- What type of insurance is needed for a co-op or condo?
- Lending institutions may require additional homeowner's insurance to protect their investment in a condo or co-op. A condo or co-op owner may also need additional insurance for belongings or liability, as well as living expenses in temporary housing after an accident or a disaster. An insurance policy covering the entire condo development for both liability and physical damage is usually purchased by a condo/co-op organization. You would pay for that as part of your monthly assessment.
- Does my homeowner’s insurance cover flooding?
- A homeowner’s insurance policy generally will not provide flood coverage for incidents caused by a rising tide of water, such as a river that floods or a flood caused by a heavy rain. However, if your basement floods because your sump pump breaks, you may be covered under your regular homeowner’s policy. But typically, if you want to be certain you're covered in case of a flood, you'll need to buy a separate flood insurance policy.
- What types of disasters are covered under a traditional homeowner’s insurance policy?
- Homeowner’s insurance usually covers damage caused by the following: fire or lightning, windstorm or hail, explosions, riots or civil commotion, aircraft or vehicles, smoke, vandalism or malicious mischief, theft, volcanic eruptions, falling objects, and the weight of ice, snow or sleet. Also covered are certain types of water damage caused by plumbing, heating, air-conditioning, automatic sprinkler systems or household appliances and certain types of damage by electrical systems.
- Can I own a home without buying homeowner’s insurance?
- A homeowner is not required by law to have homeowner’s insurance. However, if you need a mortgage to purchase your property, the lender will require you to carry homeowner's insurance as a condition of granting you the loan.
- Can I get insurance if I rent?
- Renter’s insurance covers personal possessions in a house or an apartment.
- What’s the difference between cancellation and nonrenewal?
- An insurance company cannot cancel a homeowner's policy unless the premium is not paid or the homeowner has committed fraud or has made serious misrepresentations on his or her insurance application. An insurance company can choose not to renew a policy at its expiration. However, the company must give the homeowner ample notice and an explanation for the nonrenewal. If your policy has been terminated, you should find out whether it has been cancelled (and why) or simply has not been renewed.
- How much homeowner’s insurance do I need?
- You should buy enough insurance to cover the reconstruction of the structure of your home, replace your personal belongings and cover the cost of living elsewhere while your damaged home is being rebuilt. You should also make sure you have enough liability coverage, equal to at least twice the total amount of your assets.
- Do I need separate coverage for jewelry? Artwork?
- A standard homeowner’s policy includes coverage for jewelry and other valuable items. However, the standard policy typically has a $1,500 limit of liability for theft of jewelry. Coverage can be increased by increasing the limit of liability or “scheduling” specific items through “floater” policies. You can also get specific insurance for artwork and other items of high value.
- What is a home inventory?
- A home inventory is a list of everything in your home. It’s helpful to have in case of a flood, fire or catastrophe. If you have done an inventory of your possessions, you'll have an easier time getting reimbursed by your insurance company.
- How do I inventory my possessions?
- First, create a list of your belongings, including make and model, and catalog them. Add sales receipts, purchase contracts and appraisals. Clothing can be cataloged by category (pants, shoes, etc.). Record the serial numbers of major appliances and electronic equipment. Take photos or a video of each room and of valuable or expensive items. You may wish to keep this list, along with digital photos and a video, in an electronic computer file, with a printed backup. You should keep at least one copy of your home inventory in a safe-deposit box, or at a friends or relative’s home.
