Homeowners Insurance Terms To Know For First-Time Homeowners

Receiving a call from your real estate agent telling you that there is a closing date scheduled for your home purchase will be exciting news to receive, but before you can attend, you will need to make sure you have homeowners insurance on the house you are buying. If you are unfamiliar with home insurance but need to purchase a policy, here are some terms you should familiarize yourself with before making the call to an insurance agency.

Declaration's Page

The first thing to know about homeowners insurance is that after you purchase a policy, you will receive a document called the declaration's page. This page simply proves that you have homeowners insurance, and it lists the location of the house you are insuring and the types of coverage it has. This page is basically a summary of the insurance policy you have on your home.


When you are buying insurance, you will also hear the term "deductible." This term simply refers to the amount of money you are responsible to pay if you ever file a claim. Your insurance policy may cover the remainder of the claim but not until you pay this amount first.


In insurance, "premium" is another word to describe the costs you have for the policy. Insurance costs money, and you are paying for coverage for unexpected problems and situations that arise. To have this coverage on a home you own, you are required to pay the premiums for the policy. The premiums you pay may be monthly installment payments, or you may prepay for six or 12 months.


When it comes to the coverage you have, the term "perils" refers to the types of problems you might experience with your house that your policy would cover. For example, your policy likely covers fires and storm damage, and this would be listed on your declaration's page. It most likely would not cover flood damage, though, which means that flood damage would not be listed as a covered peril on your policy.


If you need to add extra coverage to your house for any reason, the extra coverage you add would be listed in the form of an endorsement. An endorsement is something that is strictly designed to cover one specific asset you own, such as a diamond necklace or valuable vase.

Knowing and understanding these terms can help you obtain the right coverage and protect yourself to the full extent in which you choose. To get a policy, call a homeowners insurance agency like Oliveira Insurance Agency in your city.