HERE'S AN ARTICLE I wrote for the landing page of a bank client in May, 2017. The names have been taken out to protect the innocent. And also me.

Insurance 101 for Homeowners

Buying a home brings many new financial issues into your life, and insurance is one of the most critical. Typically you must buy at least a minimal level of homeowners insurance before you can finalize a mortgage. That basic coverage, however, may not be enough to protect a home that’s the biggest investment of your life.

As you decide on the right level of coverage for your home, here are some basics to keep in mind courtesy of our financial professionals at SAMPLE BANK.

What Homeowners Insurance Covers

Standard homeowners’ policies cover a broad range of damages caused by fire, smoke, wind, hail, theft, vandalism and similar events. You can typically expect a standard policy to cover:

Your actual home
Structures on your property, such as a garage, fence, pool, driveway or shed
Personal property such as home furnishings and other items, though high-value items such as jewelry or artwork may require additional insurance
Some forms of personal liability, such as medical costs if someone is injured on your property or if someone in your household causes damage to a neighbor’s property

What It Doesn’t Cover

If you run a business on your property that's housed in a separate structure, losses to the building or any inventory and equipment are not covered in a typical homeowners policy. You might also need to purchase additional coverage if:

Your house is in a high-risk area for fire, floods, earthquakes, or other natural disasters
You want coverage against flash floods, sewer backups, mold or water damage
You have expensive art, jewelry or business equipment
You want greater protection against high-value personal liability claims

Finding the Right Level of Coverage

To protect yourself, a comprehensive homeowners insurance policy includes more complete hazard coverage. Balancing the expense versus the risk often comes down to these key terms:

Replacement cost
Fair market value
Deductible

Not all policies cover the entire cost of replacing lost property. Buying coverage for replacement cost helps to bridge the gap caused by inflation and loss of value when property items are no longer new. Otherwise, if a claim is made, it will be assessed at fair market value. Since some items depreciate quickly, you may not get enough from a claim to cover or replace the items that were lost or damaged. In these cases, it is up to you to determine if your home and personal property should be covered for replacement cost.

A deductible is the amount you have to pay when you make a claim. You can decrease your insurance costs with a higher deductible, meaning you'll have to pay more if you ever do make a claim. But be careful. It might be tempting to go for the lower rate, but that short-term savings can evaporate later if you find yourself on the hook for a $10,000 deductible.

Where to Learn More

At SAMPLE BANK, a century of home lending experience and deep roots throughout the SAMPLE area have earned us a reputation for trusted, neighbor-to-neighbor advice. If you have home financing or insurance questions, contact our team today. We’re happy to provide answers -- or even put you in touch with respected insurance professionals who will make you feel right at home with your coverage options.