What Even IS Insurance?

What even is homeowners insurance? Insurance is generally a complicated and difficult thing to figure out without extra help, and insurance websites aren’t always the most clear. The purpose of this post is to help you understand some of the basics about homeowners insurance so that you can be more well-prepared and understand what you’re getting yourself into when you seek out homeowners insurance policies for the first time, or if you want to make changes to your current policy.


What factors affect premiums for my home?



  • Location of the home. The location of your home can affect your policy depending on factors of the location. If the location of your property is prone to hurricanes, earthquakes, flooding, tornadoes, or other factors, your premium may be higher.
  • Age of the home. The age of your home, the type of structure, wiring, roof, garage, etc. can also affect your premium. Older homes may have a higher premium to pay, as well as whether your home is made of brick, frame, stone, or synthetic siding.
  • Having safety precautions in place. Burglar alarm systems, smoke detectors, fire extinguishers, sprinkler systems, deadbolts, and other safety precautions can help lower your premium if they are present in your home.
  • Personal factors. If you are a smoker, your premiums may be higher. Alternatively, if you have good credit, your premiums could be lower.
  • Claims history. Any past claims you’ve filed on your home could raise your premium.



Unlike car insurance, homeowners insurance is not required if you own a home. However, if you do not have insurance coverage on your property, any damages to it will not be covered. Some lenders may require that you get homeowners insurance in order to lend to you, so keep that in mind when going through a mortgage lender, and ask questions if you’re not sure exactly what is required of you. With homeowners insurance, it is necessary to keep in mind that not all types of damage will be covered under a basic insurance plan. In many cases, flood damage, earthquake damage, and potentially other types of damage will not be covered in a basic plan. Some insurance companies have the option to add those services, and for others you may have to seek out additional options for coverage (particularly for flood insurance) outside of your main insurance provider.


What is nonrenewal? When can my insurance company do that?

At the end of your policy term, your insurance company can choose not to renew your policy. This can happen for many reasons, but most insurance companies are required to inform you of their reasoning behind nonrenewal. You can also make the choice not to renew your policy,


What about cancellation?

Your insurance company can choose to cancel your policy for a few different reasons. They can cancel if:

  • Your policy has been in effect for under 60 days
  • You fail to pay your premiums
  • You commit fraud or serious misrepresentation on the application


What’s in a policy?

All the paperwork involved in insurance can get confusing and overwhelming. In general, a policy is made up of the following items.

Declarations page – summary information of the policy

  1. Name and address of insured (you/you and your spouse)
  2. The monetary amount of coverage in the policy
  3. Description of the insured property
  4. Cost of insurance
  5. Name of insurance company
  6. Contact information

Definitions page – the meaning of the terms in the policy.

Coverage – details on the protections for the property, and the liabilities.

Exclusions – anything that is not covered by your policy.

Endorsements – Riders, amendments, or attachments that alter coverage in the policy. These might have additional premiums related.


Those are some of the basics in understanding insurance, and we hope that they are helpful as you change, update, or begin your work with insurance companies for your home or property. Good luck, homeowners!