Homeowners Insurance Policies

• Excepting the requirements of most mortgage lenders, homeowners insurance is a voluntary proposition. In spite of the costs, experts strongly advise homeowners to maintain a policy to protect their investment. The premiums on homeowners insurance policies are priced based on variables including the size and age of the home, the home's location, the age and condition of components such as wiring and plumbing, and the presence of such devices as security systems and smoke alarms.
  
  

Dwelling Coverage

• At a fundamental level, homeowners insurance protects the dwelling -- the structure of the home itself. Basic dwelling coverage protects against damage due to fire, social unrest and weather conditions. This includes damage caused by smoke, severe storms, vandalism and vehicular recklessness. Additional coverage includes damage resulting from ice and the effects of cold on heating and plumbing infrastructure. The highest levels of coverage comprise all risks except for international conflicts, flooding and seismic activity, unless otherwise indicated.
  
  

Content Coverage

• Most homeowners insurance policies also cover content -- the material objects kept within the home. Content coverage protects valuables, furniture, appliances, kitchenware or any other items that a policyholder wishes to cover. Insurance providers advise homeowners to make a list of all items they wish to cover, ideally accompanied by descriptions and receipts or appraisals. Content coverage primarily protects against theft, but it also covers damage to contents caused by the same risks specified in dwelling coverage.
  
  

Personal Liability

• Homeowners insurance policies may also contain coverage for personal liability in connection with the property where the home is located. In other words, personal liability coverage protects the policyholder in the event that someone else suffers physical injury or damage to his belongings while on the policyholder's property. If a lawsuit were to ensue, the policy would cover some or all of the costs for which the policyholder would be deemed responsible.
  
  

Amount of Coverage, Premiums and Deductibles

• The cost structure of homeowner's insurance policies functions in a similar manner to other types of insurance. The insurance company offers coverage in varying amounts and percentages. Though a policy's overall premium is affected by the property risks and personal risks of the policyholder, premiums rise with higher amounts of coverage. If it is unlikely that certain risks detailed in a policy will come to pass, policyholders may opt to offset the premium cost by accepting higher deductible amounts. These deductibles become payable only in the event of a claim.