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The Housing Site
Illinois Fair Housing Initiative

Insurance & Redlining Laws

Homeowners/Hazard Insurance

Who Needs Homeowners Insurance?

Most lenders require you to have homeowners insurance; therefore, if you need a loan to purchase a home, you need homeowners insurance.

Homeowners insurance protects you from financial losses resulting from:

  • theft
  • damage to your house, other buildings on your property
  • your personal belongings
  • and from liability (if you are legally responsible for causing injury to others or damage to their property.)

Renters need insurance too!

Your landlord may insure the building you live in, but the landlord's insurance doesn't cover your personal belongings.

Hint - Although you can buy separate policies for theft, liability and other perils, package plans combining the three are common and often offer discounts. Homeowners policies can vary among companies, so it's important to shop around and to read your policy.

Basic Homeowners Insurance Coverage

Liability

Pays for bodily injury to another person or property damage for which you or members of your household are legally responsible. It may also pay for a lawyer to defend you if you need one.

Medical Payments

Pays for injury to another person who is accidentally injured on your property, or injured by you or members of your family. It pays up to the limit of medical payments coverage you purchased. This coverage pays no matter who is at fault. It does not apply to your own injuries or your family members living with you.

Property

Pays for physical damage to your home, personal property, and detached buildings on your property such as garages and tool sheds. Property coverage is the most complex part of your policy, and generally includes coverage for:

  1. covered perils

    Events such as fire, windstorm and theft that cause sudden and accidental damage to your property. Your personal property is covered anywhere in the world. Keep in mind though that policies often limit how much you can recover for belongings damaged or destroyed away from home, or on high-priced items like jewelry, antiques, art, or computers.

  2. additional living expenses

    Costs incurred above your normal living expenses when a covered loss forces you to move from your home temporarily. For example, it may pay a portion of your motel and restaurant expenses if a fire destroys your house or apartment.