If you're currently financing your home through a bank or some other type of mortgage lender, you already know that you're required to buy and maintain homeowner's insurance for the life of the loan, but are you completely confident you're getting all the protection you need from your homeowner's policy? Are you getting the best price? Homeowner's insurance is a great safeguard against a number of perils which could befall you and your home, but unless you read your policy carefully and ask all of the right questions beforehand, you may be getting less security than you think for the money. In this article we will discuss homeowner's insurance in a little more detail, including items which may not be covered by a traditional policy and how you can lower your annual premiums.

What Homeowner's Insurance Covers

Your home insurance policy has two main-and very important-functions. The first is to protect you from potential liability should someone be injured in your home. Liability insurance will protect you from financial responsibility and possible legal action should someone get hurt on your property, and can pay for things such as hospital expenses, medical payments and loss of wages reimbursement to the person injured.

The other part of your insurance policy, often called comprehensive coverage, will reimburse you for any damages to your home caused by:

• Fire

• Theft

• Vandalism

• Electrical or Plumbing mishaps

• Wind and Rain

• Hail, sleet and snow

• And a number of other accidents which can cause damage

Is There Anything My Homeowner's Insurance Policy Doesn't Cover?

Unfortunately, the standard homeowner's insurance plan has a number of exclusions-things you'll usually be required to pay more for by securing a separate policy or through a rider to your existing plan. Some of these include:

• Personal property. While most homeowner's insurance policies can adequately protect the structure itself, most require an additional policy or a rider if you want to similarly protect your personal belongings that are inside the house.

• Floods. Flood insurance is almost never included in a standard homeowner's insurance policy. If you live in an area susceptible to seasonal flooding, you'll probably want to pay extra to have this type of insurance included.

• Earthquake Insurance. Earthquakes can cause significant damage to a home, but sadly, earthquake insurance is not standard with the typical homeowner's insurance policy. To receive earthquake protection, you will almost always need to secure additional coverage.

Homeowners' Insurance: The Price

Homeowner's insurance, while absolutely critical for home owners, can be quite expensive. Typically the annual premiums for homeowner's insurance depend on all of the following:

• The state in which the property is located

• The age of the property

• The value of the property

• The condition of the property

• The deductible amount

Home owners looking to reduce their annual premiums can begin by making improvements to the property, especially those improvements that add to the overall safety of the home. Also, if you are willing to carry a larger deductible-the amount you will be required to pay before the insurance payments kick in-you can significantly reduce your annual premium.

The best advice is to read your home insurance policy thoroughly and carefully before agreeing to any of its provisions. Be sure to ask questions before you sign anything. The more homework you do when comparing home insurance policies the more knowledgeable and better prepared you'll be should you ever be compelled to file a claim.