Protecting Your Investment with Home Insurance
September 08, 2022
September 08, 2022
Homeownership comes with risks that are sometimes out of your control. Taking out an insurance policy on your home helps protect you, your family and your investment.
A home insurance policy provides a layer of protection against unexpected damage to your property. For example, if your home is damaged by a fire or windstorm, your insurance company will provide you with funds to repair damaged property back to the condition it was in prior to the incident. Coverage can vary greatly depending on the company and plan you choose.
Most policies cover four essential areas, according to the Insurance Information Institute:
On top of these standard areas of coverage, insurance carriers offer other coverages, referred to as endorsements, often for an additional premium, or monthly cost. This can include items such as:
With such a wide range of options to choose from, it is best to work with your insurance agent or broker to consider your specific needs to determine which plans and endorsements make sense for your budget and your property.
Home insurance premiums depend on factors including where you live, what type of home you live in, the age and condition of your home, your plan’s deductible, and your insurance loss history.
The average cost of home insurance in the United States is $1,784 annually, or $149 per month, according to a survey from NerdWallet.
In addition to your premium, you should factor in the cost of your deductible. This is the amount you will have to pay out of pocket if you need to make a claim. Deductible amounts will vary based on your level of coverage.
Here is a list of common insurance-related terms that can help you understand your coverage:
To learn more about maintaining your home, visit My Home by Freddie Mac®.
Sign up to receive resources, tools and tips about buying, owning, refinancing, selling and renting a home in your inbox.