Which of the following best defines homeowners insurance? (2024)

Which of the following best defines homeowners insurance?

Homeowners insurance is a form of property insurance that covers losses and damages to your residence, along with furnishings and other assets in the home. Homeowners insurance also provides liability coverage against accidents in the home or on the property.

What is the meaning of homeowners insurance?

Homeowners' insurance is a specific type of property insurance. Homeowners' insurance covers damage or loss by theft and against perils which can include fire, and storm damage. It also may insure the owner for accidental injury or death for which the owner may be legally responsible.

What is the definition of homeowners insurance quizlet?

Homeowners insurance is designed to protect your home from what are called "perils." A peril is your exposure to risk or something that causes loss or destruction. ... Homeowners 2 (HO2): This policy protects your property against 18 perils (including 11 perils from Homeowners 1).

Which of the following best defines homeowner's insurance multiple choice question?

Final answer:

Homeowner's insurance refers to coverage for your residence and its financial risks. It provides protection against damages or losses to your home and its contents, as well as liability coverage for accidents that may occur on your property.

What does home insurance actually cover?

Home insurance usually covers the structure of your home and your personal belongings, typically covering the cost to repair or rebuild your home after a covered event, such as fire, hurricane, vandalism, or theft. Many policies will also cover detached structures, such as a garage, shed, fence, or gazebo.

What is homeowners insurance vs home insurance?

Homeowners insurance, also known as home insurance, is coverage that is required by all mortgage lenders for all borrowers. Unlike the requirement to buy PMI, the requirement to buy homeowners insurance is not related to the amount of the down payment that you make on your home.

Which statement about homeowners insurance is true?

The statement about homeowners insurance that is true is:

Homeowners insurance policies vary in terms of premiums and deductibles. Premiums are the monthly payments made to the insurance company, while deductibles are the amount the policyholder must pay out of pocket before the insurance company covers any losses.

Which of the following is a definition of insurance quizlet?

Insurance is an agreement in which and individual pays a company to protect him/her from possible loss or damage, can be a property loss or financial loss.

What does a homeowners insurance policy typically provide quizlet?

Most homeowners' insurance policies include coverage of the dwelling and outbuildings, personal property damage or loss, liability for injury and medical bills for others who are hurt on the property if the homeowner is found legally liable, and loss of use.

What is another name for homeowners insurance?

Hazard insurance is another name for dwelling coverage, which is one part of a homeowners policy. Standard home insurance also offers other benefits, such as coverage for your personal belongings.

What are the three main types of homeowners insurance?

Homeowners insurance policies generally cover destruction and damage to a residence's interior and exterior, the loss or theft of possessions, and personal liability for harm to others. Three basic levels of coverage exist: actual cash value, replacement cost, and extended replacement cost/value.

Which of the following is the most common type of homeowner's insurance policies?

The most common type of homeowners insurance is the HO-3 policy. HO-3 policies offer more expansive coverage than HO-2s, meaning that your home's structure is safeguarded against all perils except for those specifically excluded (for example, earthquakes and floods) in your policy.

What are the two primary parts of homeowners insurance?

What Is Covered By Homeowners Insurance? The homeowners policy contains two sections. Section I provides property coverages (A, B, C and D) while Section II provides liability coverages (E and F).

Which area is not protected by most homeowners insurance?

These are the areas that are not protected by most home insurance.
  • Flooding. ...
  • Earthquakes. ...
  • Business equipment. ...
  • Jewelry or artwork. ...
  • Power outages. ...
  • Nuclear hazard. ...
  • War. ...
  • Dog bites. Most homeowner insurance covers medical bills and legal fees caused by dog bites.

What are the cons of homeowners insurance?

Cons of Home Insurance:
  • Cost: One of the primary drawbacks is the cost of home insurance. ...
  • Deductibles: Home insurance policies often come with deductibles, which means you need to pay a certain amount out of pocket before the insurance coverage kicks in.
Oct 12, 2023

Why is it important to have homeowners insurance?

Homeowners insurance is important because it protects consumers' homes and personal property. In the event of a total loss, insurance can provide the primary source of rebuilding funds. It also provides liability coverage for legal actions from injuries or damage from another person on their property.

Does homeowners insurance pay off your mortgage if the house is lost?

If a covered disaster completely destroys your house, your standard homeowner's insurance policy includes a "loss of use" or "additional living expense" protection, providing temporary housing until you recover. It pays off your mortgage, freeing you of that obligation.

Does home insurance need to match loan amount?

Lenders will likely require that you carry enough insurance to cover the amount of your loan. For instance, if you bought your home for $300,000 with a $60,000 down payment, your lender will want you to have at least $240,000 worth of dwelling coverage.

What is the clause commonly found in a homeowners insurance policy?

A mortgagee clause is found in many property insurance policies, and it provides protection for a mortgage lender if a property is damaged. Normally, you will be asked to agree to a mortgagee clause when you take out a mortgage.

Which of these two are not usually covered by homeowners insurance?

Earthquake and water damage

In most states, earthquakes, sinkholes, and other earth movements are not covered by your standard policy.

Which type of insurance is required by law?

Compulsory insurance is insurance that must be legally owned to do an activity, such as auto insurance and driving a car. Other types of compulsory insurance include workers' compensation and professional liability insurance.

Which of the following best defines an insurance policy quizlet?

Which of the following best defines an insurance policy? A contract between an insured and an insurer that guarantees payment for loss caused by a specific event.

Which of the following best defines insurance?

Insurance can be defined as a contract in which a party transfers the risk of financial loss to a risk bearer for a fee.

What is the best definition of insurance?

What Is Insurance? Insurance is a contract, represented by a policy, in which a policyholder receives financial protection or reimbursem*nt against losses from an insurance company. The company pools clients' risks to make payments more affordable for the insured.

What is the most basic homeowner policy known as quizlet?

The basis for most homeowners' policies is called a basic form (HO-1), and it usually provides property coverage against damage caused by fire and lightning; glass breakage; windstorm and hail; explosion; riot and civil commotion; damage by aircraft; damage from vehicles; damage from smoke; vandalism and malicious ...

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