Ask An Agent: What Is Homeowners Insurance?

Published: July 2016

Homeowners insurance may help protect a home from risks such as fire, or damage resulting from a break-in. Most policies also offer coverage for your belongings, as well as liability coverage, which may help if you're ever sued over an accident in your home.

When a power surge struck one couple's home, it destroyed electrical wiring, the breaker box, and every appliance in the house that was plugged in. Fortunately, homeowners insurance was there to help. Allstate agent Jose Gomez tells the story.

Video Transcript

[On-screen] Ask an Agent: What is Homeowners Insurance?

[Voiceover] I'm Jose Gomez, and I'm an Allstate agency owner with an office in Chicago's Avondale neighborhood. I'm here to talk about homeowners insurance, which may help protect a home from certain risks, such as a fire or damage resulting from a break-in. But most policies also offer other types of coverage, such as protection for your personal belongings if they are damaged due to a covered loss.

I remember a couple who had a home in a south suburb of Chicago. One day, lightning struck a power transformer in their area. While the electric company was working on repairs, a power surge occurred and caused significant damage to the customers' house, the electrical systems, and their appliances.

The air-conditioner, furnace, home theater system, any appliance that was plugged in was ruined. The power surge also fried the electric wiring in the house and blew the breaker box, leaving the family in the dark.

All together, the power surge caused about $33,000 in damage. That included about $11,000 for repairs to the dwelling, including wiring, the air conditioner and furnace, and almost $22,000 in destroyed personal property, such as TVs and appliances.

The homeowners called me to file the claim, and I assured them that their insurance would help pay to repair the damage to their home and help pay to replace their belongings. They paid a $1,000 deductible and they had enough coverage to replace what was damaged. So while it was an unfortunate event, they were grateful that their policy covered the loss.

[On-screen]

Learn more about insurance coverage and concepts: www.allstate.com/askanagent

All images are stock photos used for illustrative purposes only.

Details are specific to this claim. Each claim is different and handled on a case-by-case basis.

Coverage subject to terms, conditions and availability. Policy issuance is subject to qualifications. Allstate Property and Casualty Insurance Company, Allstate Fire and Casualty Insurance Company, Allstate Indemnity Company, Allstate New Jersey Property and Casualty Insurance Company. © 2016 Allstate Insurance Company, Northbrook, IL.

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This content is for informational purposes only and may not be applicable to all situations.

Coverage subject to terms, conditions, and availability. Policy issuance is subject to qualifications. Allstate Insurance Company, Allstate Indemnity Company, Allstate Fire and Casualty Insurance Company, Allstate Property and Casualty Insurance Company, Northbrook, IL. © 2020 Allstate Insurance Company, Northbrook, IL.