About homeowner insurance

Generally, homeowner’s insurance refers to coverage of the dwelling and the personal property at the home in case of damage from various occurrences and perils.  Some amount of insurance is needed if one is not readily and comfortably able to pay cash to rebuild the dwelling and replace the personal property in the event of a disaster.  Consider that personal property also may include furnishings, fixtures, appliances, flooring, window and wall treatments, and the like, which, though easy to take for granted on a daily basis, collectively may be expensive to replace.   It also frequently includes liability protection in case another person suffers injury or property damage on your premises.

Maintaining sufficient insurance also is a condition of many mortgages, because the loan is secured by the real estate, and the lender wants to make sure that it has sufficient collateral.  If you are financing or refinancing a loan involving the residence, proof of insurance almost certainly will be needed to close the transaction.

If the property is a single family home, the insurance needs to address the entirety of the dwelling and personal property.  In a condominium, the unit owner is responsible for insuring what is inside of the condominium unit, sometimes described as everything from the walls in.  The condominium association generally will be responsible for providing insurance for the common elements, which often include the building structure, mechanical systems, corridors, and amenities.

Typically the unit owners pay their share of the cost of insurance in the assessments.  In an incident, the association will have to address damage to the common elements, but will not necessarily be responsible for restoring or redecoration the interior of a damaged unit.  That is where the unit owner’s policy comes into play.

There are various types of policies, as well as exclusions, so it is important to review any policy carefully to make sure that it provides coverage to the extent intended.  Also, specialized policies can be obtained for coverage of incidents not included within general homeowner policies.  Flood insurance is one example of this.   Therefore, it is important that homeowners consult an insurance professional and obtain the relevant information and coverage for themselves – before a potential claim arises.