Home Insurance: By the Numbers

While these numbers may not surprise you - most mortgage brokers will require some level of homeowner's insurance there are many things to consider before choosing a policy for your home.

Let's first explain the basics of home insurance and how it impacts your bottom line as a homeowner. These types of policies generally provide coverage for damage to a home's structure, damage to your personal property and liability coverage in case you're considered at fault for property damage or bodily injuries.

BY THE NUMBERS

Here are some statistics from various sources that tell the story of today's homeownership landscape. You can use this information to better inform yourself and take control of finding the best agents and policies available to you in your area.

• 47% of homeowners are unsure of what their insurance covers, according to the Lending Tree report.

• J.D. Power similarly found that 52% of homeowners don't have a complete understanding of their coverage.

• A survey by Marshall & Swift/Boeckh found that 60% of homes are undervalued with regard to insurance, with an average undervaluation of 17%.

It's up to you as the homeowner to understand your policy, how to utilize it, and how to make sure your insurance agent is sharing the right type of information with you. If you're in the percentage of homeowners who are in the dark about their policies, it's time to set up a meeting with your local insurance agent to get a better grip on what you're paying for.

INSURANCE CLAIMS

• The average payment per homeowners claim in the U.S. was $8,787, according to data from the Insurance Research Council.

• There were five claims filed and paid per 100 insured homes in the last year.

• Claim frequency has decreased over the last two decades, whereas claim severity, the average amount paid per claim, has increased significantly.

• The most common causes of home insurance claims, from an analysis of Travelers Insurance policyholders, are wind, non-weather water damage, hail, weather-related water damage and theft. Altogether, these five causes make up 77% of all homeowners' insurance claims.

Understanding the claims process will help you navigate through it should you need to put it to work for you and your family. Homeowners who are more lax about their policies may find making a claim a difficult experience.