A homeowner’s insurance or home insurance, as the name suggests, is an insurance that covers damages to the house and assets of the insured. This property insurance also covers accidents that occur in the house or on the property.

A homeowner is required to give proof of home insurance before he can take a mortgage on the said home. It can be obtained from the bank that lends the mortgage amount or from a separate insurer. If the homeowner obtains it from the bank itself, he might have to pay extra for it. However, he/she can shop around for various offers and select the one best suited to him. If the bank is the one providing the insurance, the insurance payments will be included in the monthly mortgage payments.

A home insurance policy covers four primary things. These include interior damage to the house, exterior damage to the house, loss or damage to assets in the home or property, accidents or injuries that occur to the property. When a claim is made on any of these four instances, the homeowner will first pay the amount of money required to get his insurance plan to start paying, called the deductible and the insurer will pay the rest. The higher the deductible, the lower the costs paid by the insurer on his monthly or annual premiums.

The standard liability limit, which is the amount the insured gets in the event of an unfortunate incident, is often set at $100,000. The insured can, of course, raise the limit if he chooses to.

Natural disasters are usually not covered by home insurances. If a homeowner lives in an area prone to natural calamities, he might have to get a policy that covers the disaster. That said, most home insurances tend to cover certain disasters such as hurricanes or tornadoes.

While a home warranty covers damages to appliances caused by wear and tear for a certain period of time after which it expires, a homeowner’s insurance does not cover damages incurred by wear and tear of appliances. A home insurance is also different from a mortgage insurance. The former protects the homeowner, the latter covers the lender.

There are several ways to lower the costs incurred by your home insurance policy:

• Before you settle for a home insurance policy, shop around. This could help you save a good amount of money. Check with your friends, check with the insurance department, check the yellow pages, check consumer guides, check online insurance quote services, check insurance agents, and check insurance companies. This should give you a fair idea of the money involved in terms of what you get and how much you have to pay. It will also give you an idea of the kind of services different insurers offer.
• Try to raise your deductibles when you purchase a home insurance policy. The more your deductible, the less premium you have to pay.
• Remember, what you paid for the house does not cover rebuilding costs. If you include the land under your house which is not at risk from thieves or natural disasters in deciding how much of insurance you should buy, you will lose a lot in paying premiums.
• If possible, buy your home insurance and car insurance from the same company. You might get money worth up to 15% off your premium sometimes.
• Find out from your insurance agent how you can make your home more disaster resistant such as adding storm shutters, strengthening your roof, and the like.
• Improve the security of your home with smoke detectors, burglar alarms, or dead-bolt locks. This usually gets you a discount of at least 5% on your policy premiums.
• Ask what other discounts are available. Not all companies give out the discounts they offer at the beginning.
• Ensure you have a good credit record. Insurers now use credit scores to determine the price of insurance policies. Having a good credit history can lower your insurance costs. Ensure you pay your bills on time, don’t exceed your credit limit and keep your credit balance low.
• Stay with the same insurer as long as you can. This will help you avail some good discounts on your premiums.
• Ensure you go through the limits of your policy annually. Also, get your property and possessions values every year.
• If you are on a government plan where your home insurance is concerned, switch to a private company. You might get more for less.
• Consider the cost of a home insurance when you buy a home. Homes closer to a fire hydrant, for instance, can have insurance policies that cost less. Also, if the plumbing, electrical, and heating systems are relatively new, say, ten years old or less, it will bring down the cost of the premiums you pay. Before you buy a house, check the Comprehensive Loss Underwriting Exchange report to have an idea of the insurance claim history of the property.