A homeowners insurance policy normally insures your home’s physical structure and your belongings if something terrible happens (think fire). According to the Insurance Information Institute, homeowners insurance policies generally include legal protections against injuries and property damage to others caused by you or members of your family (this could even include your pets).
If you live in a condo or co-op apartment, a typical homeowners policy covers your belongings, liability and parts of the interior structure as defined in the by-laws or the lease. Renters are also encouraged to protect themselves with renters insurance. These policies provide similar property and liability protections for those who don’t actually own their home. If your home becomes uninhabitable due to damage from a disaster, all these policies provide coverage for the additional expenses you’ll incur due to living away from home.
Homeowners insurance is too critical to skimp on but it does have its limitations. For example, flood insurance and earthquake insurance are not standard but generally must be purchased as separate types of policies. Depending on where you live, however, these coverages might be nearly unavoidable. As a property owner, you should also do your best to help avoid disasters or accidents. The best way to do that is through proper maintenance. Maintenance is the homeowners’ responsibility but there are certain insurance products that can help protect against appliance wear and tear, for example.
Most American wealth is tied to homeownership. You simply can’t afford to not protect your most valuable asset or the people who live in it. Homeowners insurance can help you maximize that asset and ensure that it remains a tool to build Black wealth.