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Once the excitement of buying a new home begins to subside, thereality of protecting that home from the unexpected needs to beaddressed. A home is likely to be your biggest investment ever.

Homeowner’s insurance policies are challenging to understand.You can have many different types of coverage within a singlepolicy, and different financial obligations can be set out for thehomeowner and the insurer. Here is a basic overview of some of themost important points you need to consider when choosing yourcoverage.

Types of coverage

You can cover many different insurable incidents and items withyour homeowner’s insurance policy. Some of the most common are:

Dwelling: Dwelling covers losses that occur to your home and anystructures that are attached to it. Dwelling does not cover fencesor sheds.

Other structures: “Other structures” covers those structures onyour property that are not attached to your home, like your fenceor shed.

Personal possessions: Your furniture, clothing, electronics andheirlooms are all covered by the personal possession section ofyour homeowner’s insurance policy.

Personal liability: If someone gets hurt in your home or on yourproperty, personal liability coverage can pay for injuries andtreatments that exceed your deductible.

Flood: Flood insurance covers damage that results from actualflooding and is generally purchased only by homeowners who live ina flood zone. It is important to remember flood insurance pays onlywhen the flooding of your home is the result of an actual flood.For instance, if your roof were torn off by a hurricane and theinside of your home became flooded, that would not be a claim foryour flood insurance to pay. If, however, your local lakeoverflowed and flooded your neighborhood, it would. In manyinstances, you may have to purchase flood insurance separately fromregular homeowner’s insurance.


Your homeowner’s insurance policy limits determine the maximumamount the insurance company will pay you in the event of a claim.The lower your limits, the less expensive your policy will be. Ofcourse, if your limits are too low, you may not receive enough fromthe insurance company to reimburse you for a total loss. Whentrying to determine appropriate limits for your policy, think aboutwhat you would need in order to rebuild your home after a totalloss. Then, think about how much of that bill you could afford topay with your savings. The difference is what you should consideras a limit.


Deductibles are the out-of-pocket expenses that you must paybefore your insurance company will begin paying for losses. Inorder to get money from your homeowner’s insurance policy, yourclaim (or loss) must exceed the deductible. The larger yourdeductible, the lower your premium will be because you will beshouldering more of the risk. However, if you cannot afford to payyour deductible, then you could have trouble making yourself wholeafter a loss.

Life insurance

Life insurance is not offeredas part of a homeowner’s insurance policy, so you must buy itseparately. Adequate life insurance coverage can help ensure thatyour family gets to keep their home in the event the unexpectedwere to happen to you or your spouse.

Term life insurance coverage from a reputable company like SBLIis likely a good option to explore. SBLI offers affordable ratesfor fixed term and yearly renewable term (YRT) coverage. Fixed termcoverage lasts for the term you choose and most often can bepurchased for 10, 15, 20, 25 or 30 years. Many people buy it tocover the term of their mortgage. With this type of term insurance,your premium remains fixed for the term you select. Yearlyrenewable term may be less expensive in the early years of yourpolicy. However, this form of terminsurance renews every year and the premium increases each yearas well. Visit or talk to aninsurance representative for a quick quote at (888) GET-SBLI.

SBLI and The No Nonsense Life Insurance Company are registeredtrademarks of The Savings Bank Life Insurance Company ofMassachusetts, which is no way affiliated with SBLI USA Mutual LifeInsurance Company, Inc. NAIC #: 70435. SBLI products may not beavailable in all states.

Courtesy of ARAcontent

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