{"id":17235,"date":"2022-01-25T09:15:26","date_gmt":"2022-01-25T16:15:26","guid":{"rendered":"https:\/\/www.richmondamerican.com\/blog\/?p=17235"},"modified":"2025-03-10T09:15:55","modified_gmt":"2025-03-10T15:15:55","slug":"homeowners-insurance","status":"publish","type":"post","link":"https:\/\/www.richmondamerican.com\/blog\/homeowners-insurance\/","title":{"rendered":"What is Homeowners Insurance?"},"content":{"rendered":"\n

Homeowners insurance (also known as hazard insurance or abbreviated as HOI) provides coverage for catastrophic events that may occur to your home. It covers the house, contents, and personal liability (for example a guest\u2019s medical expenses if you are legally responsible). Most mortgage lenders require homeowners to maintain homeowners insurance as a loan condition.<\/p>\n\n\n\n

Now that we\u2019ve answered the basic question of \u201cwhat is homeowners insurance?\u201d, here are some terms that may come in handy when insuring your new home:<\/p>\n\n\n\n

Insurance deductible<\/strong><\/h2>\n\n\n\n

What you pay out of pocket after your claim is approved.<\/p>\n\n\n\n

Insurance policy rider<\/strong><\/h2>\n\n\n\n

Riders are optional coverages that are available to enhance your homeowners policy. Possible riders are jewelry riders, replacement cost coverage on your home, replacement cost coverage on contents, water\/sewer backup, etc. For example, homeowners purchase riders when the valuables they wish to insure are excluded from the standard policy or when the standard policy will only cover a portion of the item\u2019s value.<\/p>\n\n\n\n

Exclusion<\/strong><\/h2>\n\n\n\n

Anything that your policy does not cover. An insurance company can contest your claim and refuse to pay if it involves loss of property that was not covered in your original policy.<\/p>\n\n\n\n

Inflation guard<\/strong><\/h2>\n\n\n\n

Homes are insured based on their replacement cost (primarily labor and materials) rather than their market value. Inflation guard is a component of a homeowners policy that automatically adjusts the home\u2019s replacement cost valuation annually to keep up with rising costs of labor and materials.<\/p>\n\n\n\n

Insurance premium<\/strong><\/h2>\n\n\n\n

The amount of money you pay (usually over the course of a year) for your insurance policy. You\u2019ll pay a higher or lower premium depending on how large your deductible is, what you are insuring and a variety of other factors.<\/p>\n\n\n\n

Insurance claim<\/strong><\/h2>\n\n\n\n

Your formal request for the insurance company to reimburse you for damages. An insurance carrier can contest your claim and refuse to pay if your claim involves loss of property that was not covered in your insurance policy<\/p>\n\n\n\n

TIP!<\/strong><\/em><\/em><\/strong> There are several rating factors for insuring new homes and the age of the home is one such consideration. Newer homes typically have lower insurance premiums than their resale counterparts. In addition, many carriers offer a new home purchase discount for homes that have been purchased within the past 12 months (available for new construction and resale homes), so be sure to ask your insurance specialist if you\u2019re eligible! <\/p>\n\n\n\n

Still have questions regarding what homeowners insurance is? For more information on this important topic, contact an insurance specialist from our affiliate, American Home Insurance Agency, at 888.325.8108<\/a><\/strong> or visit AmericanHomeInsurance.com<\/strong><\/a>.<\/p>\n\n\n\n

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