A Beginner’s Guide to Home Insurance

Buying a home is the biggest investment most people will ever make. It is also one of the biggest responsibilities many will ever have. Protecting this investment is critical, and this is where homeowners insurance comes in to play.

Not only does homeowners insurance cover your dwelling and and belongings from the unknown, it also helps you rebuild your home and life when disaster strikes in the form of a total loss.

It is helpful to look at your policy as a four-piece puzzle. The parts that should be included are as follows:

  1. Structure – Basic homeowners insurance typically covers the structure itself, including any damage from natural disasters or vandalism. This may include simple damage repairs or a complete replacement in the event of a total loss. Not everything is protected, however. Items such as worn-out appliances, health risks such as mold and asbestos, as well as damage from floods and mudslides are typically not covered and require the purchase of additional insurance coverage.
  2. Stuff Inside – Your policy can help you replace items such as furniture and clothes if they are stolen or destroyed. Your allowed coverage is typically about half the amount of the value of your home’s structure.
  3. Liability Protection – This part of your policy protects you against things such as lawsuits for personal injury or property damage. This would include incidences such as fallen trees and home accidents. Pet damage is also typically covered (personal or property).
  4. Additional Expenses – Finally, additional expenses that are covered include things such as hotel rooms and other short to medium-term lodging expenses in the event that you are displaced from your home for a time.

How much will all of this cost? It depends on several factors such as the size of your home, the type of construction, location, and even personal factors like whether or not you are a smoker. Insurance cost is not a one-size-fits-all thing, so it is important to shop around and choose a company that you can trust.


About cozbycpa

Heather L. Cozby is a CPA on the South Shore and Cape Cod. The managing partner of Cozby & Company, LLC, Heather has the resources and experience necessary to provide quality professional services on a timely basis and at a reasonable cost. She specializes in tax planning & preparation; audit, review & compilation services; management advisory services; bookkeeping; and accounting. Her unique niche is in working with homeowners’ associations and condominium trusts, advising with rental real estate, and providing outsourced financial consulting for mid-sized companies. She is more entrepreneurial than most accountants, and offers the best of both worlds - providing the services of a larger firm while retaining the ability to connect with her clients on a personal level.
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