A home insurance policy is a basic contract between the homeowner and the insurance company. The insurance company agrees to pay the homeowner in the event of certain financial losses related to damage to the home. The insurance policy only covers a particular period of time (usually one full year) and then must be renewed or another policy purchased.

Most home insurance policies are customized to fit the policy holder's needs. The deductible amounts, the coverage amounts and even the situations that are (or are not) covered can change from home to home and from year to year. It is important that a homeowner take the time to read over the entire insurance policy before agreeing to pay the premiums.

Once the initial home insurance policy is purchased there may be a need to purchase supplemental policies. Traditional home insurance DOES NOT cover flooding and so a supplemental flood insurance policy should be purchased for homes that are built in areas in or around the 100 year flood zone (many mortgage companies are now requiring that supplemental insurance). Homeowners with valuable collections or expensive art work may also want to look into supplemental coverage for those items.

Home insurance does not have to be complicated or confusing. Take some time to read through the policy and then look at supplemental policies to fill in any gaps that may occur.