What is Homeowners Insurance?

Every homeowner wants to protect their home and personal belongings from unforeseen incidences and damages, which is where homeowner insurance comes into the picture. It acts as a safety net against many risks, such as natural disasters, accidents, thefts, and more.  This ensures peace of mind and financial security for homeowners. The duration differs from policy to policy. In most general cases, the duration is 12 months and needs to be renewed every year.

In this blog, we will provide complete information on home insurance, including what it covers and how it works. Additionally, we will discuss its tax implications and validity in rental properties.

What Does Home Insurance Cover?

Household insurance covers your property, that is, your home, belongings, structures, and other content from unexpected events or accidents that can damage the place or cause other losses. In such cases, you should file a claim with your insurance company. The insurance provider will compensate for the losses covered in your homeowner’s insurance policy. 

Is Homeowners Insurance Mandatory?

No. Unlike car insurance, household insurance is not mandatory by law. But, if your property is on the mortgage, your lender might require you to get homeowners insurance for the property. As your home is one of the most valuable assets, it might be in your best interest to safeguard it with a homeowners insurance policy, even when you have fully repaid your mortgage loan. There are multiple benefits of the policy, including coverage from elements as well as in the case where you are sued for causing accidental injuries to another person. 

Tax Deductible on Home Insurance

In most cases, tax is not deducted from homeowners insurance. However, there can be certain exceptions. If you have a home-based business, the insurance will be tax deductible. A tax professional will be the right person to guide you in this context. Some insurance companies might offer you non-tax-deductible insurance coverage even with an on-premise business, especially if the business does not attract too many employees and clients.

In the case of rental properties, does homeowner's insurance apply?

In that case, you will need to get a landlord insurance policy. This applies if you have tenants on the property, too. A landlord insurance policy will help protect your property from different aspects. The liability coverage is more or less similar to the coverages of home insurance policies.

A homeowners insurance policy provides peace of mind by comprehensively securing your home from unexpected events. Speak to Total Mortgage today for more information on homeowners insurance so you can make the right choice.