Finding The Right Kind of Property Insurance


Homeowners and renters insurance protect your home and personal property against damage or loss, and insures you in case someone gets hurt while on your property. You may already have insurance on your home if you have a mortgage on the property, because most lenders make insurance a condition of the loan.

Renters insurance, or tenant insurance, offers renters coverage similar to homeowners insurance. If you are a renter, do not assume your landlord carries insurance on your personal belongings; you may wish to purchase a separate policy.

What Can Homeowners or Renters Insurance Cover?

Homeowners or renters insurance may pay claims for:

  • damage to your home, garage, and other outbuildings
  • loss of furniture and other personal property due to damage or theft, both at home and away
  • additional living expenses if you rent temporary quarters while your house is being repaired

Homeowners or renters insurance may also:

  • include liability for bodily injury and property damage that you cause to others through negligence
  • include liability for accidents happening in and around your home, as well as away from home, for which you are responsible
  • pay for injuries occurring in and around your home to anyone other than you or your family
  • provide limited coverage for money, gold, jewelry, and stamp and coin collections
  • cover personal property in storage

In addition to general shopping for insurance tips, keep these points in mind when shopping for homeowners insurance:

  • Insure your house, not the land under it. If you don’t subtract the value of the land when deciding how much homeowner’s insurance to buy, you will pay more than you should.
  • Purchase enough coverage to replace what is insured. “Replacement Cost Coverage” gives you the money to rebuild your home and replace its contents. An “Actual Cash Value” policy is cheaper but pays the difference between your property’s worth at the time of loss minus the depreciation for age and wear.
  • Ask about special coverage you might need. You may have to pay extra for computers, cameras, jewelry, art, antiques, musical instruments, stamp collections, etc.
  • Flood and earthquake damage are not covered by a standard homeowners policy. The cost of a separate earthquake policy will depend on the likelihood of earthquakes in your area. Homeowners who live in areas prone to flooding should take advantage of the National Flood Insurance Program (NFIP).
  • If you are a renter, do not assume your landlord carries insurance on your personal belongings.  Purchase a separate policy for renters.

For help in deciding how much insurance coverage to buy, contact your state insurance regulator.

Flood Insurance

Since standard homeowners insurance doesn’t cover flooding, it’s important to have protection against flood damage. If you live in an area prone to flooding, you should take advantage of the National Flood Insurance Program.

National Flood Insurance Program (NFIP)

Administered by the Federal Emergency Management Agency (FEMA), the NFIP offers flood insurance to homeowners, renters, and business owners if their community participates in the program. The program works closely with more than 80 private insurance companies.

  • Homes and businesses with mortgages from federally regulated or insured lenders in high-risk flood areas are required to have flood insurance. While flood insurance is not federally required if you live in a moderate-to-low risk flood area, it is still available and strongly recommended.
    • To find out if your home or business is in a community that participates in the NFIP, refer to the Community Status Book section on
  • Flood insurance protects two types of insurable property: building and contents. The first covers your building; the latter covers your possessions; and neither covers the land they occupy. Flood insurance only covers damage that is a direct result of flooding.
  • Rates are set nationally and do not differ from company to company or agent to agent. These rates depend on many factors, such as the 1) date and 2) type of construction of your home, and 3) your building’s level of risk.
  • Flood insurance can only be purchased through an insurance agent; you cannot purchase it directly from the federal government. Typically, there’s a 30-day waiting period from the date of purchase before your policy goes into effect.


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