Your Questions About Homeowners Insurance, Answered
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Whether you own a home, are in the market for one, or are planning for the future, it’s important to know all you can about homeowners insurance. Like health and auto insurance, homeowners insurance protects you from financial losses in the case of a fire, theft, or other event that causes damage to your home and/or the items in it. If you’re taking out a mortgage, your bank will almost certainly require homeowners insurance—but even if you’re buying outright or already fully own your home, purchasing a policy protects you in case of emergency. And let’s face it, it’s always better to have a plan for worst-case scenarios before they happen.
We want you to feel informed and empowered when you’re purchasing your homeowners insurance, so below, we answered some of the most common (and most important) questions on the topic. While you hope to never have to use it, a homeowners policy helps you sleep a bit sounder knowing that your property and your belongings are protected in the case of disaster or emergency.
What is homeowners insurance? Do you have to have it?
Homeowners insurance enables you to recoup losses to your home and belongings resulting from events like fires, theft, and certain weather conditions*. If you’re taking out a mortgage, your bank will most likely require you to purchase homeowners insurance. Most HOAs (homeowners associations) also require it. If you’re buying (or already own) your home outright, you don’t need to purchase it unless it’s required by your HOA—however, it’s still recommended.
*Do not assume that all weather-related damage will be covered. Floods and earthquakes usually require their own policies. Always inquire with your insurance provider for a detailed list of coverages.
What does homeowners insurance cover?
A standard homeowners insurance quote usually covers your home’s main structure/dwelling, unattached structures like garages and sheds, the belongings inside your home, liability if someone injures themself on your property, and housing costs for any time your home is uninhabitable. Conditions are attached to reimbursement, however. For example, sudden storm damage to your roof is typically covered, but gradual wear or lack of maintenance are not. Same for plumbing: Sudden leaks (and associated mold) are covered, but preventable issues and/or unmaintained systems (and any associated mold because of neglect) aren’t.
How do I know if I need additional coverage?
Whether or not you’ll need additional coverage depends on what’s covered in the primary plan. Issues that are often require an additional policy or policy rider to increase coverage include floods, earthquakes, theft or loss of high-value items like jewelry and art, sump pump backups, loss relating to identity theft, and liability insurance above the standard limit. There are many situations and coverage options that could be personal to your unique situation, so make sure to go over this in detail when meeting with your insurance agent.
How much is homeowners insurance?
As of May 2025 according to NerdWallet, it cost on average $2,110/year to insure a $300,000 home. However, even for houses valued at the same price, the homeowners insurance cost can vary greatly based on variables like the value of your belongings, the area where you live, and the insurer you choose.
Should I bundle my car and homeowners insurance?
Most insurers offer a discount to customers who bundle their car and homeowners insurance, so it’s definitely worth looking into if you own both. If you decide to go with one company, make sure both policies are tailored to your liking before you commit to either. If not, you can always keep them separate.
How much homeowners insurance do I need?
You should base the amount of homeowners insurance you buy not on your home’s current value, but on the estimated cost to rebuild and recoup your losses in the worst-case scenario. That number will vary greatly depending on factors like where you live, the size of your home, additional structures that need rebuilding, and what materials your home is constructed from. Your insurer should be able to provide an accurate personalized quote for you.
Is homeowners insurance tax deductible?
Homeowners insurance is generally not tax deductible except in the case of certain specific scenarios. For example, if you declare a portion of your home exclusively for business use or if it’s partially a rental property. In these cases, you might be able to deduct a fraction of the cost equivalent to the percentage of your home dedicated to such use. However, this is all dependent on your specific plan. It’s important to note that homeowners insurance may be worth the cost even without the tax deduction, as it helps insure your home is protected against loss.
What are some tips for organizing documents so I’m ready in the event of an emergency?
The last thing you want to worry about after a traumatic event like a theft or a fire is scraping together documents and paperwork to submit to your insurance company. To make the claim process less stressful, we suggest taking photos or videos of every room in your home about once a year to digitally inventory your belongings. We also recommend keeping receipts for all major purchases and storing them with your policy information and any other important data in a fireproof safe and/or in the cloud.
Remember, being prepared is always a good idea—especially when it comes to something as significant and personal as your home. With a good homeowners insurance plan, you can rest easy knowing your property and your belongings will be protected.
Amy Gordon
Amy Gordon is a freelance writer and editor who splits her time between New York, NY and Vieques, PR. When she’s not at her desk, you’ll probably find her on a plane with her nose in a book, in the Caribbean snorkeling through coral reefs, or on the couch watching true crime TV. Learn more and read her work at www.amygordonmedia.com.
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