Home Insurance

What is homeowners insurance?

What is homeowners insurance?

Homeowners insurance is an indispensable safeguard for homeowners in Maine, given the significant investment involved in buying a home. This insurance generally offers financial protection if your home is damaged or destroyed, helping ensure you’re not left to shoulder the potentially enormous cost of repairs or reconstruction alone.

Homeowners insurance policies are tailored for Maine residents who have single-family homes. Most policies cover a house, belongings in the house, and the homeowner themselves.

Who in Maine needs home insurance?

Who in Maine needs home insurance?

Home insurance is highly recommended for virtually all homeowners in Maine. The cost of rebuilding or repairing a home after significant damage is beyond what many homeowners can afford.

When a house is financed with a primary or secondary mortgage, certain insurance coverage for the building itself is often required. This is usually a requirement of the lender’s loan agreement, ensuring the lender will still be financially protected if the home is destroyed in a covered incident.

Regardless of any lender requirement, however, homeowners policies are strongly recommended because of the crucial protections they offer. 

Your Home Is Important, Make Sure It’s Protected

You have to ask yourself…

What would happen if a disaster struck your home tomorrow? Are you confident you’re properly covered for damages and total loss? Would you be required to pay out of pocket for some or all the repairs?

These questions are crucial to address because major insurance carriers hold on to new clients after a disaster strikes. More importantly, when you’re facing a crisis, you’ll feel less pressure knowing:

   1. Your representative took the time to make sure you have the proper protection
   2. Your insurance carrier has your back

What is the meaning of dwelling replacement cost coverage?

Dwelling coverage can come in several different amounts. More coverage obviously provides better protection if a house is totally destroyed. The main options for dwelling coverage are:

  • Actual Cash Value Coverage: Typically insures a home up to its market value. It might suffice to pay off a mortgage and recoup any equity, but isn’t necessarily enough to cover the full cost of rebuilding.
  • Replacement Cost Coverage: Typically insures a home up to the estimated cost of rebuilding. While it may increase the chances of restoring your home to its pre-loss condition, costs could spike beyond this amount if there’s a major regional disaster.
  • Guaranteed Replacement Cost Coverage: Typically covers an additional percentage above the replacement cost, sometimes 25% more. This extra coverage may help rebuild even if there’s a spike in construction costs. Some insurers may refer to this as extended replacement cost coverage, and not all insurers offer it.

An insurance agent specializing in homeowners policies can help homeowners decide which type of dwelling coverage they should get. If guaranteed replacement cost coverage is preferred, a knowledgeable and independent agent can explore different insurers’ policies to see if this coverage is available.

What coverages do home insurance policies usually include?

A home insurance policy typically includes a variety of important coverages:

  • Dwelling Coverage: Generally covers the home itself against damages resulting from covered perils. Depending on your policy type, these perils could be named explicitly (in a named perils policy), or the policy might cover all risks not explicitly listed as exclusions (in an open perils policy).
  • Other Structures Coverage: Generally covers any other structures on the property, which aren’t attached to the main house. These could include a detached garage shed, fence, guest house or something else, depending on a policy’s specifics.
  • Personal Property Coverage: Generally covers personal belongings inside the home, usually including electronics, clothing, furniture and other items. Depending on a policy, this coverage may extend to when belongings aren’t at the residence.
  • Loss of Use Coverage: Generally covers additional living expenses if the home becomes uninhabitable due to a covered peril. Covered costs might be rent for another place to live, and meal costs before another living space is found..
  • Personal Liability Coverage: Generally covers legal expenses if someone gets injured on the property and decides to sue. It also normally covers defamation and certain other incidents. All immediate family members living at the residence are typically covered.

What is Home Insurance for?

Home insurance covers the hazards that most homeowners face. When a loss occurs, you will file a claim with your insurance carrier, and you are paid for the expenses minus any outstanding deductible amounts.

Insurance also covers personal liability exposures to protect you from many situations that could lead to lawsuits from others.

For instance, you can be held responsible if someone slips and falls in your home or is injured on your property. Liability coverage is there to protect you.

You could also potentially need insurance to protect you from having to pay

  • Storm damage, fire, windstorm, lightning, and hail
  • Dog bite liability 
  • Manufactured home coverage
  • Trampoline or swimming pool liability insurance
  • Wind damage
  • Sinkholes
  • Flood damage
  • Sewer or septic backups
  • Replacement cost for personal property
  • Umbrella liability insurance

When you see an independent insurance agent like us, you have the chance to explore all your options for insurance and protect the things that are most important to you.

Little-known facts about Homeowners Insurance

There are many things about insuring a home that most consumers aren’t aware of. We are here to make sure you avoid potential problem areas, including:

  • Most policies will not cover sewer backup unless you purchase a special endorsement
  • Damages caused by surface water or water that flows below the surface of the ground aren’t usually covered
  • A standard homeowners policy typically does not include Flood Insurance
  • A standard homeowners policy only covers jewelry, up to set limits if the loss resulted from one of the perils named on the policy
  • Many policies default to actual cash value, which means if you purchased a widescreen TV and home theater system for $1,000, it may now only be worth $450, so that's all you'll receive on the claim. Just like the dwelling limit mentioned above, replacement cost insurance pays out the total replacement value of your possessions, not their market value, in case of a claim.

    You can combine your Home and Auto policies (and others) for even more savings.

Various abbreviations are often used by insurance professionals to denote different types of homeowners policies. Here are some commonly used abbreviations and what they generally offer:

  • HO-1: Basic protections for a single-family house.
  • HO-2: More protections for a house.
  • HO-3: Substantially better protections for a house.
  • HO-5: Some of the best protections for a house.
  • HO-7: Specialized coverage for mobile homes and manufactured housing.
  • HO-8: Specialized coverage for older homes.

Who needs to insure their homes

  • Frame houses
  • CBS homes (Concrete Block Structure)
  • Manufactured homes
  • Mobile homes on acreage
  • Condos
  • Townhouses
  • Secondary homes
  • Homes you rent to others
  • Seasonal resident homes

Why We're Different

While most insurance products are similar in price and function, insurance providers vary when it comes to structuring a policy tailored to you.

After all, there’s no one-size-fits-all insurance policy when it comes to your personal policy.

Contact us today, and we’ll help you protect what matters most.

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