Who decides what insurance to get when I make my house payment: the mortgage company or me?
You do. The mortgage company collects a set amount from you each month in order to protect their investment. This money is put in escrow and covers your insurance and tales when they fall due. However the policy is still yours and you may select the insurance you feel offers the best coverage at the best rates. In fact, if you allow the mortgage company to choose, you might well end up paying more for your homeowners insurance.

What exactly does a homeowners policy cover?
"Exact" coverage is tricky to define because there are different policies and about 900 insurance companies writing most of the property/casualty business in the United States. However, 80 percent of homeowners policies are based on standard form. All homeowners policies cover two important areas: property and liability.

These cover your structures and possessions - property insurance - and protect against personal liability. Personal liability, as its name implies, means you are legally obligated to pay money to another person for actions caused by you, your family, or your property. That liability extends to medical payments to others for injuries caused by you or your family.

Are floods, earthquakes, and other natural disasters covered?
Most catastrophes are covered: flood and earthquake damage. however, are not covered by a standard policy and both are more common than many people realize. Check with your agent about special catastrophic policies for normally excluded conditions like floods and earthquakes.

Are there exclusions I should know about?
Most catastrophes are covered: flood and earthquake damage. however, are not covered by a standard policy and both are more common than many people realize. Check with your agent about special catastrophic policies for normally excluded conditions like floods and earthquakes.

One other exclusion that can be costly is the Ordinance or Law exclusion. Building codes established by governmental bodies that drive up the cost of rebuilding or repairing after a loss occurs may not be covered by your insurance policy. Thus, if you discover when replacing damaged property that current law demands higher grade or more expensive materials than the original ones being replaced, the materials may not be covered for the full price.
 

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