Homeowner's Insurance

Homeowner's insurance is the type of property insurance that covers private homes. It is an insurance liability for accidents that may happen at the home or at the hands of the homeowner. It requires that at least one of the named insured occupies the home. It is a multiple-line insurance, meaning that it includes both property and liability coverage, with an indivisible premium, meaning that a single premium is paid for all risks.
The cost of homeowner's insurance often depends on what it would cost to replace the house and which additional items to be insured are attached to the policy. The insurance policy itself is a lengthy contract, and names what will and what will not be paid in the case of various events. Typically, claims due to floods are excluded. Special insurance can be purchased for these possibilities, including flood insurance. Insurance should be adjusted to reflect replacement cost, usually upon application of an inflation factor or a cost index.
The home insurance policy is usually a term contract—a contract that is in effect for a fixed period of time. The payment the insured makes to the insurer is called the premium. The insured must pay the insurer the premium each term. Most insurers charge a lower premium if it appears less likely the home will be damaged or destroyed.