Insuring your house protects you from financial disaster. For most people, their home is their largest investment. If you do not properly insure your home, you could find yourself facing a serious financial problem in the event of a flood, fire, robbery, or other disaster.

Here is 10 facts about insuring your house that you need to know to make sure you are protected:


  1. Most banks or other lenders require you to have homeowners insurance on your house. If you do not insure your house, your bank or lender may purchase a policy for you and add that cost on to your monthly bill. This can be more expensive than if you simply purchase your coverage yourself.
  2. You may be able to lower your homeowners insurance cost.Grouping your policy with your car insurance provider or with a company that provides you with other forms of insurance such as life insurance can save you money.
  3. Replacement coverage is different from market value coverage. Replacement coverage means that if your house is completely destroyed by a fire or some other covered event, you will be reimbursed by your insurance company for the total amount it cost to replace the home. This is important, since you may not be able to buy a home comparable to yours if the check is only for the amount you paid for the house or for the actual value of your home.
  4. Riders may be required for special collections or expensive items. If you have a very expensive engagement ring, you will likely need an add-on policy to cover it. The same is true if you have fur coats, expensive art, or other items that aren’t found in every home.
  5. You may not be protected from possibly damaging situations such as natural disasters. Purchasing additional coverage for natural disasters like hurricanes, tornadoes, earthquakes, and other catastrophic events may not be covered unless you have a policy that completely covers these types of natural disasters.
  6. Keeping records is key. If you buy items such as electronics, that you want your home insurance to cover it is a good idea to keep the receipts so you can prove you did have those items in the event that something happens. Scan the receipts and keep an electronic copy as well so that if the house burns down, the receipts, and records aren’t destroyed along with the items.
  7. A home inventory is also important. Just as with records, a home inventory can help you to know the value of your items. This is useful in deciding how much coverage you need to purchase, as well as in proving your losses to the insurance company.
  8. Installing security systems can lower your cost. If you have a security system installed, you reduce the chances of a robbery or home invasion. This can reduce your monthly premiums and also help make you safer.
  9. Raising your deductible can also lower your costs. Your deductible is the amount you are required to pay before the home insurance company will start footing the bill. If you have an emergency fund or money saved and can afford a higher deductible, this can result in a lower monthly bill from your insurance company.
  10. Ensure you have enough coverage to protect your assets. Homeowners insurance doesn’t just cover your costs if something happens to your house or possessions; it also pays your legal bills and damages if someone is injured in your home. Having enough liability coverage in case you are sued is essential to being financially protected.
"Top 10 Facts About Insuring Your House | Enlighten Me." Enlighten Me. N.p., 23 Oct. 2013. Web. 17 Sept. 2015.