Homeowners Insurance: What You Need to Know

Homeowners insurance is a must-have when it comes to protecting what’s likely your biggest investment—your home. While no one wants to think about worst-case scenarios, the right coverage acts as a financial safety net 🛡️ when unexpected events happen. Here’s how it works:

 ☑️ Covers Repair & Rebuilding Costs – If your home is damaged by fire, storms, or other covered events, your insurance helps pay for repairs or a complete rebuild 🔨.

✅ Protects Your Belongings – Most policies cover personal property like furniture, electronics, and clothing if they’re stolen or damaged 🛋️📱👕.

☑️Provides Liability Coverage – If someone is injured on your property, your insurance can help cover medical bills 🏥 or legal fees ⚖️ if you’re held responsible.

At its core, homeowners insurance = peace of mind. Knowing you’re financially protected from disasters reduces stress and makes homeownership feel more secure. 🏠💙.

But here’s something many homeowners don’t realize—your first yearly insurance payment is rolled into your closing costs, but it’s not a one-time expense. You’ll need to budget for it monthly as long as you own your home, and future payments are rolled into your escrow account along with your taxes. 

Costs and Claims Are Rising

Over the last few years, homeowners insurance costs have been climbing in Metro Detroit. According to Insurance.com, four primary factors are behind the increase in premiums:

• 🔺More severe weather and wildfires are leading to higher claims.
• 🔺Insurance companies are leaving high-risk areas, reducing options for homeowners in certain states.
• 🔺Previous rate increases haven’t kept pace with rising claim costs.
• 🔺The cost of rebuilding has gone up due to higher prices for materials and labor.

In short, disasters happen more often, repair costs rise, and insurance companies adjust their rates to keep up. ICE Mortgage Technology data shows how much the average annual premium has increased over the last decade (see graph below).