Submitted by Michael P. Herzog, director of personal lines of insurance for James Zander & Associates Insurance

Homeowners insurance applies to any type of residence where you own your primary residence structure, even if the lot it is on might be communal or owned by another party. Single family homes, townhomes, mobile homes and manufactured homes would qualify for homeowners insurance. Condominiums would not, as insurance is purchased for the whole complex by the association. The condominium owner, however, would have the option to purchase contents and personal property coverage if desired.

Homeowners insurance is not required by law, but it is contractually required by mortgage companies if you are borrowing money to purchase your residence. Mortgage companies require it because homes are a highly leveraged asset. Many homeowners put down 5 to 20 percent and finance the rest by borrowing from the mortgage company. With the easy credit of the past few years, many people financed 100 to 125 percent of their homes and didn’t put down anything. To manage the risk of loaning money for your home, lenders require you to have insurance.

If you own your home outright, then you have a choice on how you want to manage the risk of home ownership. Insurance was created to help people survive unfortunate events by spreading the cost of claims over a large base of clients. Those that do own their home outright should never go without insurance, for the risk of loss far outweighs the cost.

Making a well-informed decision

There are many factors to consider and numerous products from which to choose. Anyone who has insurance for their home and automobile should try and get a quote with both policies at the same company to leverage discounts. Each insurance company rates their clients on an assortment of factors, including claim history, education level, type of job, how many miles you travel, financial history, age and location.

Try and understand what your real insurance needs are. Take the time when meeting with an insurance agent to ask questions. The more you know, the better protected you will be.

Look for the best value when comparing insurance quotes with different agencies, not the cheapest quote. Insurance is best served when you figure out how much of a deductible you can actually afford to spend compared to how much you can afford to lose if a catastrophe happens. Do your research before changing policies or carriers.

Find an insurance agent you trust by asking friends and family who they use and if they are happy with their agent. The role of a good agent is to be there for times other than picking up a premium check. You want someone who knows what they are talking about, who cares that you are properly covered in the event of a catastrophe and who will be your advocate if a major claim is warranted.

James Zander & Associates has served residents of the Dallas/Ft. Worth, Texas, area since 1983. It serves those needing group and individual health, commercial and personal lines of insurance.

As of June 23, 2011, this service provider was highly rated on Angie’s List. Ratings are subject to change based on consumer feedback, so check AngiesList.com for the most up-to-date reviews. The views expressed by this author do not necessarily reflect those of Angie’s List.