Podcast - 080: Everything you need to know about homeowners insurance

In this episode, realtor Anthony Luevanos and lender Angel Luevanos touch on homeowners insurance. They interviewed Farmers Insurance agency owner Bridgette Martinez. She shares the story of how one of her clients was sued for $1,000,000 and what you can do to protect yourself from that liability!

Is homeowners insurance required?

No, homeowners insurance is not required unless you are financing your home. Most banks will need homeowner’s insurance to finance your loan.

However, we recommend getting a policy even if your home is paid off.

What kind of homeowners insurance do I need?

There is no such thing as basic insurance. Every home insurance policy covers fire, wind, hail, and storm. You can add additional endorsements, such as personal property, liability, etc.

How much homeowners insurance do I need?

Homeowner’s insurance covers based on reconstruction cost, not the home's fair market value. It’s based on rebuilding the dwelling to its current-like condition if there was a loss to the property.

Most policies come packaged with additional protections such as personal property and liability. Your insurance agent will help you decide what’s best for you based on your circumstances.

When do I need to get homeowners insurance?

As soon as you open escrow, you should start looking for insurance. We recommend talking to a few agents and figuring out which policy works best for you. 

Do I need homeowners insurance after I pay off my home?

No, you do not need it, but unless you have the funds to pay for the reconstruction of your entire home lying around somewhere, we recommend keeping insurance.

The cost of rebuilding a home can run well over $300,000, which most people do not have.

What will happen if my home is damaged and I do not have homeowners insurance?

You will be liable for out-of-pocket damages if you do not have insurance. Therefore, you must have the appropriate insurance policy with the proper coverage.

How much does home insurance cost?

No one price fits all. Every home has its unique characteristics and pricing.

A typical three-bedroom, two-bathroom home in Los Angeles County ranges between $700 to $1,000 a year. But several factors impact pricing, such as the age of the house and where it is geographically located.