Why is homeowners insurance important

Generally, the home in which you live is your greatest investment. Make finding and maintaining adequate coverage on this valuable assest a priority.

Mortgage lenders typically require that you have homeowners insurance before they will close your home loan. Before you close, make sure that you have covered all bases in terms of getting appropriate discounts on your insurance by letting your policy provider know if you have:

• Other coverages with the same insurer
  
  
• Smoke detectors, fire alarms or burglar alarms installed
  
  
• Major updates, such as new roofing, plumbing, electrical or heating and cooling sytems
  
  
• Determined that you can carry a higher deductible

Flood and Earthquake Damage: Generally, these are not covered in standard homeowners' insurance. Expenses from these catastrophes can be overwhelming. Consider carefully whether you would be able to withstand such an event financially. If you live in an earthquake-prone area or in a flood plain, sometimes piece of mind is worth the price.

How to get the most from your homeowners insurance

If you have luxury items, such as furs, jewelry or art, thesrt shoud be added to your policy in the form of riders. One of the smartest things you can do before a loss occurs is to develop a videotaped or photographed inventory of your belongings. The documentation should be stored in a safe deposit box or in another location separate from the house. In the event of loss, this list may prove invaluable in determining compensatory amounts.

Renter's Insurance
Suppose the apartment above the one you rent develops a leaky pipe, sending water cascading down your living room walls, destroying your stereo and television. Who is liable for the damage to your personal property? If you answered, "the landlord or the renter upstairs,' you are mistaken. Your landlord's insurance will cover his property, including the structural damage to your unit, and the renter upstairs bears no responsibility. You must assume responsibility for the loss of your personal property in the event of a fire, flood, theft or accident. You need to protect your clothing, jewelry, computer, stere, television, furnishings, art and other valuables against loss or destruction by arranging coverage through a renter's insurance policy.

Renter's insurance typically offers personal property and liability coverages similiar to those of homeowner's policies. Property insurance covers repairing or replacing personal property, while liability insurance protects you from being sued by individuals who get hurt on the landlord's property rented or leased by you. Some landlords stipulate in the renter's agreement or lease that lessees must provide proof of renters insurance prior to signing.