Home 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?
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.
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.
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.
IMPORTANT: 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.