Two important insurances home policies do not cover

Also, most people believe that insurance agents try to over-sell them. While in truth the opposite is true, most agents worry too much about getting the sale and don't offer all the products you may need.

The leading cause of foreclosure on a home is the disability of one of the principal borrowers. We insure our homes because it is, in most cases, our largest asset. We also insure it because no bank will issue a mortgage without home insurance.

Think about it for a moment. The bank is not worried if you can continue living in your home. It is only worried that if you can't make payments the home can be sold to someone else.

Disability insurance is the most needed and yet under-sold insurance product in the country. The money machine (you) can no longer produce and yet still needs to be maintained. Think of yourself as being a car that doesn't run but still needs gas, oil, maintenance and insurance. When we purchase a home we envision a secure place for our family to live and grow. Becoming disabled can end that dream.

There are many types of disability insurance products. When we use the term "long-term disability insurance," we are talking about products that usually last until we are eligible for Social Security benefits. "Short-term disability" is designed to cover consumer loans like car loans and credit cards.

Disability insurance, like life insurance, is age-weighted – "the older we are the more expensive the product."

There are two basic types of products: one that is cheaper to begin with but becomes more expensive as you get older, and one that costs more but the premium remains constant throughout the policy period. Elimination periods are also important: the longer you can wait to receive benefits, the lower the premium for the policy.

All disability policies are occupational-rated. An office worker is going to pay less than a coal miner for the same benefit. Disability benefits, like life insurance, are received tax-free; the IRS treats them as return of premium.

And that leads to the second thing a home insurance policy does not cover – death of the borrowers. In truth, the death of a borrower will be less impactful on a family than disability. Remember the money machine no longer needs to be maintained. Few households can continue mortgage payments when one of the borrowers dies. Simply put, do you want your family to stay in their home if you were to die?

Term insurance is the most common life insurance policy used to provide benefits to a family if one of the borrowers dies. It can be sold for different time periods depending on the loan time period. If you plan on making extra mortgage payments you may want to consider whole life insurance. The cash build-up could help you pay off the mortgage earlier while the death benefit provides protection for your loved ones.

Shopping for the lowest price may make sense when you are buying tires. But when buying insurance, ask what's not covered in your policy and how can you get it covered. A little more expense today may mean a lot to your family in the future.

Bob Hollick is a State Farm Insurance agent based in Washington.