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

Which of the following best defines homeowners insurance?

Homeowners insurance is a type of property insurance that covers losses and damages to your home. It also protects assets in the house. The policy usually covers interior damage, exterior damage, loss or damage of personal assets, and injury that arises while on the property.

What is the meaning of homeowners insurance?

Definition. 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 homeowners insurance quizlet?

Home Insurance Policies. 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 is a form of protection that covers the residence and associated financial risks from damages like fire and theft, as well as liability.

Which of the following are covered by a homeowner's policy?

A standard homeowners insurance policy provides coverage to repair or replace your home and its contents in the event of damage from a covered loss, including fire, smoke, theft, vandalism, or a weather event such as lightning, wind, or hail.

What is homeowners insurance and why is it important?

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.

What is the definition of insurance?

Insurance is a means of protection from financial loss in which, in exchange for a fee, a party agrees to compensate another party in the event of a certain loss, damage, or injury. It is a form of risk management, primarily used to protect against the risk of a contingent or uncertain loss.

What is homeowner's insurance sometimes called?

The reason 'hazard insurance' is a common term is actually because of lenders. Your mortgage loan provider may require hazard insurance at a minimum before they will issue you a loan because that is the only portion of the homeowners insurance policy directly related to the home structure itself.

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.

What is the most common homeowners insurance policy called?

The HO-3, also known as a "special form," is the most common homeowners insurance policy form, says the National Association of Insurance Commissioners. An HO-3 offers "open peril" coverage for the structure of your home.

Which of the following best defines insurance quizlet?

- A legally binding contract in which the insurance company agrees to pay for specified losses in exchange for premiums.

What are the three main types of homeowners insurance?

The three main types of property insurance coverage include actual cash value, replacement cost, and extended replacement cost.

What are the two main types of homeowners insurance?

Which one of the following is not covered by homeowners insurance?

Earthquake, flood, mold, earth movement, and “wear and tear” are some of the perils that are usually excluded.

Which of the following is not covered by homeowners insurance?

Many things that aren't covered under your standard policy typically result from neglect and a failure to properly maintain the property. Termites and insect damage, bird or rodent damage, rust, rot, mold, and general wear and tear are not covered.

What are the five factors that influence the cost of homeowners insurance?

What is the most important part of homeowners insurance?

The most important part of homeowners insurance is the level of coverage. Avoid paying for more than you need.

What should you add to homeowners insurance?

Whose interests are protected by homeowners insurance?

Homeowners insurance typically covers the policyholder and the people living in the home with you. These residents are all named insured. But if you need to add someone to your policy later, they're known as an additional insured.

What are the basic principles of insurance?

In insurance, there are 7 basic principles that should be upheld, ie Insurable interest, Utmost good faith, proximate cause, indemnity, subrogation, contribution and loss of minimization.

Who is not eligible for a homeowners policy?

Living in a high-risk location, having hazardous home features, home maintenance issues, your home's history of insurance claims, and more can be reasons an insurance company may determine a house to be uninsurable.

What is homeowners insurance premium?

Your homeowners insurance premium is the amount of money you pay to keep your insurance policy active for that policy term. Most insurers offer flexible payment options, with the ability to pay your homeowners premiums monthly, quarterly or annually.

Are all homeowners insurance the same?

The difference lies in how your personal property is covered: The HO-3 policy won't insure against damage to your belongings from a peril that isn't explicitly listed on your home insurance policy. HO-5 insurance, conversely, will cover damage to your items from any peril that isn't excluded on your policy.

What types of insurance are not recommended?

Which area is not protected by most homeowners insurance?