A home warranty can be a wonderful thing. It can also be a confusing one. What is a home warranty? What does a home warranty cover? How does a home warranty work? And most importantly, who pays for a home warranty, buyer or seller? There are a lot of questions to answer, and understanding who pays for a home warranty isn’t always crystal clear.
As a home buyer or seller, it’s nice to know how home warranties work and which party generally pays for the home warranty. While there isn’t necessarily one right answer, there are some common practices when it comes to paying for a home warranty.
Who Pays for a Home Warranty?
Sometimes a home warranty is involved when you buy a home. When a home is purchased, who pays for the home warranty: buyer or seller? Often, a home warranty is purchased by the seller and transferred to the buyer. The reasoning is that the seller does not want to be called on if something breaks down. If you buy a home through a real estate agent, they might throw in a home warranty plan as an added perk when you close.
What If You Purchase a Home Without a Home Warranty?
You can purchase a home without a home warranty. Just know that if something goes wrong with appliances or systems, you might be paying for it out of pocket. If the seller doesn’t offer a home warranty along with the purchase of the home, don’t worry. As a buyer you can always contact a home warranty company on your own and purchase a plan. Talk to them about your specific needs and they’ll find the best plan for you. At HSC Warranty, we’re happy to help with this.
Should You Purchase a Home Warranty as a Seller?
If you’re selling your home on your own without a real estate agent, it might be beneficial to purchase a home warranty. Why? Because it gives buyers more peace of mind when they are considering buying your house. Including a home warranty with the purchase of your home will act as an additional selling point. It could give potential buyers added confidence to purchase and could really help eliminate any hesitation they might feel.
Should You Purchase a Home Warranty As a Buyer?
If a home warranty isn’t included in the purchase of your new home, you might still consider getting a home warranty plan yourself. It doesn’t hurt to ask the seller if they can include a home warranty when they sell you the home. If they don’t, it may still be in your best interest to purchase your own plan and shield yourself from expensive repairs.
Should You Purchase a Home Warranty as a Real Estate Agent?
Having a home warranty plan for a home you’re selling as a real estate agent is a good idea. Often, buyers worry about potential repairs and maintenance that will pop up down the road. If you can provide them some reassurance with a reliable home warranty plan, it’ll help you better serve them as your clients.
How Should You Proceed?
Who pays for a home warranty? Buyer? Seller? Agent? It depends. But whether you’re selling your home “for sale by owner,” you’re a real estate agent, or you’ve recently purchased a home, you should be thinking about a home warranty. Home warranties for rentals are also available. And remember that it’s also important to renew your home warranty and have a regular inspection of your home systems to make sure they’re running well. If you want to get started with a home warranty, feel free to contact us or request a free quote.
Home warranties can be confusing at times. What exactly is a home warranty? How much does a home warranty cost? How is it different from homeowners insurance? What’s covered under a home warranty? How do you go about utilizing your home warranty? There are several questions that often circulate about home warranty plans. We’re here to provide some clarity and help you better understand the ins and outs so you can decide if a home warranty is right for you. Next, we’ll walk you through how to go about picking the best home warranty for your needs, so you can shield yourself against costly repairs.
How Much Does a Home Warranty Cost?
First and foremost, you’re probably interested to know just how much you’ll spend on a home warranty. The answer isn’t always as cut and dried as you might hope. The cost of a home warranty can vary depending on a number of factors including the number of items you want covered, the plan you choose, and how comprehensive you want your coverage to be.
Also, home warranty costs will differ from one company to the next. Like with any business, you usually get what you pay for, so the cheapest option might not be the best for your needs. Be sure to do your research and find a reliable and honest home warranty company. Wondering how much it costs to get a home warranty from HSC? Give us some basic information and we’ll give you a free quote. Or you can always call us at (800) 601-1009.
What Is the Difference Between a Home Warranty and Homeowners Insurance?
A home warranty covers certain systems and appliances in your home. Homeowners insurance protects your home, while a home warranty protects the systems and appliances that keep your home running. For instance, while your insurance might cover damages to the structure of your home, a home warranty may cover your heating system and refrigerator. Home warranties might cover anything from plumbing and electrical systems to your oven, dishwasher, and dryer. Sometimes real estate agents purchase home warranty plans as an added perk for those who buy homes from them.
What Is Covered Under a Home Warranty?
Home warranty coverage can vary depending on the plan you select. Standard coverage at HSC includes air conditioning systems, heating systems, plumbing systems, water leaks, water heaters, electrical systems, ceiling fans, central vacuums, the garbage disposal, and the garage door opener. You can also add on additional appliance coverage and coverage for a pool, a well pump, and much more. Depending on the home warranty company, you may be able to customize a home warranty plan to your specific needs.
How Do You Use Your Home Warranty?
To use your home warranty, you simply need to call the home warranty company and notify them of an issue with your covered system or appliance. They will usually send out a trained professional to repair or replace the covered item. At HSC Warranty, we will repair or replace your product so long as it is covered under the plan you select and you meet the deductible.
Is a Home Warranty Worth It?
Yes. If you want to avoid the untimely and costly repairs that pop up when owning a home, a home warranty is your best friend. For a reasonable yearly cost, you can get great coverage on many of your home’s appliances and systems. That way, if something breaks down (as it does in the average American home), you can have the peace of mind that it’ll be fixed without the need for astronomical repair bills.
How Do You Uncover the Best Home Warranty Plans?
Take some time to determine the most valuable systems and appliances in your home. Decide on the coverage you need. Search for home warranty plans that offer sufficient coverage. Beyond just coverage, you’ll want to look for a home warranty company that provides timely and professional service. You want a company that will put you first as the customer and be reliable and transparent.
What Should You Do Next?
If you’d like the peace of mind that comes from a home warranty plan, simply reach out to us. We’re happy to talk about your unique needs and find a plan that will fit them perfectly. Call us at (800) 601-1009, or get a free quote. A home warranty tailored to you could be right around the corner, so get started!
Most often when a toilet is leaking from its base, it’s in need of a new wax seal. Or, it could be as simple as tightening some tee bolts. Luckily, most of the repairs needed for a toilet leaking from the bottom are simple enough to handle yourself. You probably won’t even need to call a plumber.
Check Leak Source
First of all, check to see exactly where your toilet is leaking from. Below we discuss causes and solutions to a toilet leaking from bottom. Sometimes you might assume that the toilet is leaking from the base because there is water pooled on the floor by the toilet. However, that water might have leaked from higher up on the toilet and created a pool on the floor. Clean up the water and then periodically check on the toilet over the next half hour to see where the leak is coming from. Other possible leaks could come from a cracked tank, loose supply tube, or a malfunctioning shutoff valve.
Stop Using the Toilet
You’ll want to stop using the toilet right away. Usually, water leaking from the base of the toilet is dirty water that’s been in the toilet bowl. If you keep using the toilet, you’ll keep distributing this kind of water over the floor of your bathroom. You probably want to avoid that.
Tighten the Tee Bolts
Try to gently rock your toilet and see if it is a little loose. If there’s wiggle room between your toilet and the floor, the tee bolts might be the issue. The bolts are typically hidden beneath a cap. They secure the base of the toilet to the floor. If the tee bolts loosen, water could leak out. If the toilet isn’t loose, don’t tighten the bolts more. The base of the toilet could crack if you tighten them too much. If the bolts just rotate without tightening or if they won’t budge at all, you’ll need to replace them altogether.
Replace the Wax Ring
Your toilet might still leak even when the closet bolts are secure. If this is the case, you may need to replace your wax seal, also called a wax ring or gasket. This article on replacing a toilet gives an in-depth explanation about replacing the wax ring. Be prepared for a half-day project if you think your toilet needs a new wax ring. In order to replace the ring, you’ll need to remove your toilet from the floor and reinstall it. However, you don’t need to be a plumber to handle this project. Once you’ve purchased a new wax ring, follow these basic steps:
Remove Your Toilet
Turn off the water supply to your toilet.
Get rid of the water in the toilet’s tank and bowl. Flushing the toilet while the water supply is off will get rid of most of the water. You can mop the rest of the water out with a rag or a sponge.
Disconnect the tank from the bowl. You’ll need to remove all of the bolts connecting the tank to the bowl and rock the bowl to break the seal. Then, you can pick up the tank and carry it off the bowl. You may need a second person to help carry the tank because of its weight.
Remove the bowl from the floor. Unscrew the tee bolts at the base. Then, lift the toilet off the ground. Again, you may want a second person to help lift the toilet.
Remove the current wax ring. Pull off any of the wax ring off the toilet base and the closet flange in your floor.
Install Wax Ring and Replace Toilet
Check and fix toilet flange. The closet flange is the installment placed in your bathroom floor. You’ll want to replace or repair it, if it’s broken, cracked, or warped.
Place wax ring. Run the wax ring under warm water. Then, press it onto the base of the toilet.
Place the toilet bowl back on closet flange. Lift the toilet on to the closet flange and press down to secure the wax ring. Secure the bowl to the floor with the tee bolts.
Replace the tank. Place the tank on the bowl and secure it with its bolts.
Turn on the water supply.
Check and fix toilet leaks. Flush the toilet a few times and check for any leaks. If there are any leaks at the base, try applying more pressure to the toilet bowl to try and tighten the wax seal. You can also tighten the tee bolts on the base of the toilet.
To Caulk or Not To Caulk?
Caulking around the base of your toilet has the potential to prevent you from noticing a leaking toilet tank. If there was a leak and the base was caulked, you could develop water and structural damage below your toilet. However, some cities or buildings try to avoid bacteria from growing by requiring toilets to be caulked. If you aren’t required to caulk around the base of the toilet, you should leave it as it is.
By following the instructions we’ve given, hopefully you can fix your toilet that is leaking at the base. Always be sure to contact a professional if you are having difficulty. Or consider a home warranty that covers pipes and plumbing.
You may have noticed that some of the outlets in your kitchen, bathroom or garage look different from the other outlets in your house. These outlets are shaped differently and have two small buttons in the center. Those special outlets are called ground-fault circuit interrupter or GFCI outlets. They are also known as GFI or ground-fault interrupter outlets. In this article, we’ll explain exactly what a GFCI is and how it works. Finally, we’ll examine some of the problems that might be causing your GFCI to shut off or “trip.”
Please know that for your safety, it’s best to call a professional when dealing with electrical issues. We do not advise doing these repairs yourself without understanding the risks.
What is a GFCI Outlet?
A GFCI outlet is wired directly into your home’s electrical circuits and is designed to monitor the current flowing through the circuit. Any interruption or surge that alters the current (such as dropping a hair dryer in water or plugging too many appliances into one circuit) will cause the GFCI breaker to shut off or “trip.” By shutting off the electrical current, the GFCI protects you from electrical shocks and prevents fires caused by overheated circuits. Most states require the installation of GFCIs in areas near water sources, such as kitchens and bathrooms, as well as in all outdoor receptacles.
What Causes a GFCI Outlet to Trip?
Typically, the GFCI outlets in your home are wired in such a way that only a major electrical problem will cause them to trip. However, there are a few instances in which a GFCI will keep tripping regardless of what is plugged into it. If you GFCI keeps tripping, that means there is an underlying problem that needs to be addressed immediately. A GFCI that is continually tripping is not working properly and exposes you and your home to the risk of electrical shock or fire from an overloaded circuit.
How Does a GFCI Outlet Work?
When an electrical current escapes or “leaks” out of its proper path, it is called a ground fault or leakage current. A GFCI outlet is designed to trip about one tenth of a second after it detects even a tiny amount of leaking current. Because the circuit that is being protected by the GFCI can span multiple rooms and have multiple appliances running on the same circuit, it can be difficult to determine the cause of a tripped GFCI, especially when nothing is plugged into it or it seems to trip at random times. These “ghost trips” are most often caused by:
A ground fault somewhere in the circuit.
Moisture invading the receptacle box.
A faulty GFCI outlet.
The next section will explain each of these causes in more detail and show you how to fix the problem.
Fixing a Ground Fault in the Circuit
If you’ve reset a tripped GFCI but it keeps tripping when you plug appliances back in, then there is a ground fault or leakage current somewhere in the circuit. Until the ground fault is fixed, the GFCI will continue to trip.
To determine where the current is leaking:
1. Unplug all the appliances that are on that outlet’s circuit.
2. Push the reset button on the GFCI.
3. Plug in one appliance at a time until the GFCI trips. The last appliance you plug in/turn on is likely the source of the leakage or all of your appliances in combination are overloading the circuit. You can double check this by unplugging all the appliances that were on before the GFCI tripped, except for the last one you plugged in. If the GFCI still trips, you’ve found the source of the ground fault.
4. Replace or repair the faulty appliance.
Fixing Moisture Inside the Receptacle Box
If the problem GFCI is an outdoor receptacle or an indoor outlet that was exposed to water in some way, moisture inside the receptacle box could be causing the GFCI to trip. A wet GFCI will trip regardless of what is plugged into it and may continue to trip even if there is no visible moisture inside the box. Trapped moisture inside the box will cause the GFCI to trip until it dries up.
What to Do if There’s Moisture Inside the Receptacle Box:
1. Reset the GFCI outlet. You may have to wait several hours for the moisture inside the receptacle to dry. Removing the outside plug covers and using a hair dryer set on low to blow warm air into the box can help speed up this process.
Note: Always make sure your weatherproof covering is closed over outdoor receptacles whether there are appliances plugged in or not. If your GFCI exterior outlets are dry and still continue to trip, replacing outdoor GFCI outlets may be the only solution.
Faulty GFCI Outlet
If you have a GFCI that won’t reset even if nothing is plugged into the circuit, you either have an issue with another outlet on that circuit or a faulty GFCI. Since a single circuit can span multiple rooms, there are likely multiple outlets wired into it and a problem in any one of them can cause the GFCI to trip. The other possible explanation is that the GFCI itself is faulty. A GFCI uses sensitive circuitry to detect ground faults and over time, this circuitry can become worn out. In this situation, the only solution is to replace the GFCI.
Both of these issues are major electrical repairs and you should call an electrician if you suspect that either of these is the source of your GFCI problems. Even if you have the right equipment, poking around with live wiring without professional training is probably a bad idea.
Every year, hundreds of Americans die from electrical shocks. In a typical 120 volt outlet, 2 seconds of exposure to a ground fault or electrical surge is enough to kill an adult. GFCIs are specifically designed to protect you and your family from the devastating effects of electrical shocks or fires; that is, if they are working properly. Make sure to test your GFCIs monthly and if you notice one that is not working as it should, call a professional electrician immediately.
It’s an unfortunate fact that the heating, ventilation and air conditioning (or HVAC) system in your home is one of the most expensive components in your house. On average, installing a complete home HVAC system can set you back anywhere from $4,000-$12,000. And because this system sees almost constant use year-round (proper cooling and heating tend to be essential when it comes to keeping a comfortable home), it is also one of the most likely components to need repair or replacement. There are many factors that influence the cost of not only the HVAC system, but also the cost of hiring the contractor to install it.
In this guide, we will walk you through the process of getting competitive estimates and choosing the right contractor, and give you a breakdown of the average HVAC replacement cost. This will help you ensure that when the temperature’s not where it’s supposed to be and it comes time to invest in a new furnace and AC, you’re getting the right system for the right price.
Getting a Competitive Estimate For HVAC Replacement Cost
Have you ever noticed that when HVAC repair companies advertise HVAC installations they never really come right out and give you a price? The fact is that there are so many factors that affect the cost of replacing an HVAC system, no contractor can give a set price for every job. Besides, their main goal is to get a salesperson inside your home to sell you a package deal of equipment, accessories and installation.
These kinds of high-pressure sales strategies combined with companies that charge a fee for estimates can make it almost impossible to compare different systems and find a competitive price for your HVAC installation or repair.
5 Factors For HVAC Cost
A typical HVAC contractor will consider 5 factors when determining a cost for your system:
1. Equipment cost
The wholesale cost of the equipment needed for your home’s specific needs.
2. Installation supplies
Includes wiring, ductwork, refrigerant and thermostats.
Estimated hours of labor to do the job. This varies from one company to another.
Travel time and mileage to and from the job.
Obviously the contractor wants to make a profit from every job and will markup the estimate according to their specific policies (typically this can be anywhere from 35-60%).
Other Factors in HVAC Replacement Cost
Keep in mind that the brand of system you choose as well as the size of the necessary equipment, the complexity of the job, any extra requirements like adding new duct work, and even where you live will have an impact on the final estimate. You should always get multiple estimates before choosing your contractor and make sure to check out the company’s customer reviews to ensure you get the best value for your money.
Remember to Do Your Research
Another way you can make sure that you’re getting competitive estimates is to do a little research beforehand to get an idea of what type of equipment you’re going to need and the average cost of the separate components of your HVAC system. Armed with reliable knowledge about heating and air conditioning units pricing, you can avoid falling victim to a dishonest contractor or pushy salesperson, while still making sure you get a quality HVAC system.
In the next section, we will look at the different parts of an HVAC system and what you can expect to pay on average for each part. Being able to recognize a fair price can save you thousands when it becomes time to choose a contractor. Remember, these are only general guidelines. Prices can vary widely depending on the brand of equipment you choose and your location. For example, a high-end furnace will cost more in urban California than it does in rural Iowa – so take local prices into account.
There are several options to choose from when it comes to your home’s furnace, including gas, oil, and electric furnaces. Heat pumps are also gaining popularity in some areas because they are more energy efficient than other types of furnaces but they may not be suitable to colder climates. Oil furnaces are the most common type of furnaces used today because they are highly efficient and work well in cold climates, while electric furnaces are mostly used in areas where the need for heating is not very frequent. Oil furnaces are not very common and are used mainly in areas where natural gas or propane is not readily available.
Furnace Installation Cost
The main cost factor affecting the price of a furnace installation is size. It is essential that you have a furnace large enough to heat your entire home, but not so large that it wastes energy. You will also want to consider if the type of furnace you choose will require any additional ductwork or other supplies that may affect the cost.
Average price of an installed electric furnace: $2,000-$2,700
Average price of an installed oil furnace: $2,000-$5,000
Average price of an installed gas furnace: $3,500-$5,400
Average price of an installed heat pump: $2,300-$6,300
As you can see, the cost of your furnace installation can vary according to your specific needs. These are only average guidelines for you to remember when choosing your HVAC system to avoid being overcharged for either substandard equipment or equipment that is not sufficient for your needs.
Air Conditioner Installation Cost
Central air conditioning is by far the most cost-effective and energy efficient way to keep your home cool. And while replacing the unit is usually relatively simple, there are several factors that will impact the total HVAC replacement cost.
Size does matter! Just like your home’s furnace, the size of the central air unit plays a major role in determining the cost. A little bit of research prior to purchasing will ensure that you get an air conditioner that is an appropriate size.
SEER (Seasonal Energy Efficiency Ratio) is a calculation of a central air conditioner’s energy efficiency. The higher the SEER value, the less it costs to run it. Unless you live in an extremely hot climate, a unit with a SEER value of 16 will give you the most bang for your buck. Units with higher values are more expensive and cost more to maintain and are not necessary in areas where the central air is used for only a few months out of the year.
3. Compressor Performance
Compressor performance is the third major cost factor you need to consider. Closely related to the size of the unit, making sure that your air conditioner’s compressor is neither too big or too small for you home will keep the unit operating at its optimal efficiency, both in terms of energy and cost.
4. Ductwork Installation
One final cost factor in any air conditioner installation is whether or not new ductwork will be installed. The condition of the ductwork will determine how efficiently your HVAC system works. Over the years, the ductwork can lose its insulation or split apart at the joints, which allows cold air to escape before it can be pushed through the vents. You could end up with a nicely air conditioned attic while the rest of the house remains an oven.
Because installing ductwork properly is such a labor intensive job, you could be looking at an extra $2000-$3000 expense on top of what you’re already paying for the unit itself. Make sure that you read your contract carefully and if ductwork needs to be installed, that it is included in the estimate to avoid a nasty surprise later when your HVAC system doesn’t work as it should because you failed to have the ductwork replaced too. Dishonest contractors have been known to skimp on the ductwork because it is seldom seen by the homeowners or inspectors and it is easy to add the cost and avoid actually doing the work.
In the previous two sections, we have given you some basic guidelines to help you judge whether or not you’re getting a fair price for the separate components of your HVAC system. In the next section, we’ll give you a rough estimate of what you can expect to pay to replace your entire HVAC system.
Total HVAC Replacement Cost
While the exact cost of replacing your HVAC system will depend on several factors, including where you live, the brands of equipment you choose, and additional repairs or additions that may be needed, the numbers given here should be close to any estimates you’ve received. If you have an estimate that is significantly higher than the average cost of furnace and air conditioner replacement estimates given here, you might be dealing with a dishonest contractor or an inflated estimate.
Let’s say you are installing a new HVAC system in a 1,000 square foot home that consists of a gas furnace, central air conditioner and the ductwork labor. You could reasonably expect to pay anywhere from $6,000 to $12,000 for a similar installation.
If you are adding additional features like air purifiers, humidifiers, dehumidifiers or air recovery ventilators then the cost is going to be at the high end of this estimate. You can also expect to pay more if you are upgrading wiring or ductwork or if any of the components are a totally new installation.
Replacing your entire HVAC system does not have to be an expensive, frustrating process. Educating yourself about the factors that influence the cost of the equipment and labor and learning how to protect yourself from dishonest contractors will ensure that you get an efficient, cost-effective HVAC system that will keep your home comfortable for years to come.
Buying a home is often a complicated process, and by the time you get the keys in your hand, you’ve likely spent months thinking about things like mortgages, interest rates, and closing costs; you’ve lost count of how many hours you’ve spent reading and filling out loan applications and all you want to do is move in and start enjoying your new home. Many people don’t realize that buying a home also causes a lot of changes to their tax situation as well.
Prior to 2017, the government offered a tax break on mortgage interest as an incentive to potential home buyers. This allowed homeowners who itemized their deductions to write off some of the cost of their mortgage interest. You may also qualify to deduct mortgage interest paid as part of the settlement as long as the mortgage interest is listed in a statement provided by the lender. Other costs associated with buying a home, including property taxes, and estate taxes may also be tax deductible. If you would like more information on specific tax deductions you may qualify for, you can check IRS Publication 530 for more details or ask your tax professional.
While a detailed explanation of all the potential tax deductions associated with buying a home is beyond the scope of this article, we will answer one question many new homeowners have: is my homeowners insurance tax deductible?
Is My Homeowners Insurance Tax Deductible?
In most cases, the answer is no. According to the Internal Revenue Service, premiums for insurance are non-deductible expenses because most people generally only use their home for personal use. Therefore, payments for insurance, including payments for fire, comprehensive coverage(such as earthquake or flood coverage), and title insurance cannot be itemized on your tax return. Property losses, even if they are covered by the insurance, are also not eligible for deduction. However, there are a few cases in which you are allowed to deduct insurance premiums from your federal taxes.
Deducting Premiums for a Home Office
If you have allocated space inside your home for a home office, you can deduct the same percentage of your insurance premiums from your taxes that you deduct for household expenses. For example, if you deduct 10% of your household expenses for a home office, you can also deduct 10% of your premiums as long as the workplace qualifies for a home office deduction. Keep in mind that the nature of your business may require additional coverage that may or may not be eligible for tax deductions. Your tax professional or insurance agent can help you determine if your home office qualifies for a deduction.
Private Mortgage Insurance (PMI)
Private mortgage insurance (PMI) is meant to protect the lender from losses incurred when the borrower defaults on the loan. This type of insurance is often required for mortgage loans provided by government assistance programs or third-party lenders. Many people trying to buy a home find that they can’t afford the down payment or are unable to qualify for a traditional mortgage loan due to bad credit or low income; but they may qualify for assistance from either a government agency or lenders that provide specialized loans or financing for people in these situations. However, these types of loans pose a higher risk of default by the borrower and because of this, most of these loans require the buyer to purchase private mortgage insurance that protects the lender if the borrower fails to repay the loan.
In order to deduct your private mortgage insurance premiums from your taxes, your loan contract must have been issued after 2006 and your adjusted gross income listed on Form 1040 cannot be higher than $54,500 (or $109,000 for married couples filing jointly).
Insurance Premiums for Rental Properties
If you use part of your home as a rental property, a portion of your insurance premiums can be deducted from your taxes because the cost of those premiums is considered a business expense. The percentage of those premiums that are tax deductible depends on the rental property.
If you rent out only the basement apartment of your home, only a portion of your premium would be considered a business expense. However, if you own and rent a separate property that is not connected to your personal residence, then 100% of the insurance policy covering the rental property is tax deductible.
Landlords may also be able to deduct the cost of other insurance policies related to their rental properties regardless of whether the policies also cover their personal residence. Your tax professional will be able to determine if your policy qualifies and make sure you are getting the appropriate tax deductions for your specific situation.
Deducting Property Losses
In most cases, property losses are not tax deductible, even if they are covered under the insurance policy. However, there is one exception to this rule and it applies to losses incurred in a federally declared disaster. For example, areas impacted by the California wildfires, Hurricane Harvey and Hurricane Irma were all declared federal disaster areas. Homeowners who suffered property losses in those areas became eligible for tax deductions to cover financial losses that were not covered by their insurer.
Say you are a homeowner in a federal disaster area and you suffered $15,000 in property losses but your insurance company only reimburses you for $5,000. The remaining $10,000 can be deducted from your federal tax return as long as you itemize your deductions. You may also be able to deduct your insurance premium and depreciation depending on what type of coverage is included in your policy.
The process of purchasing a home can be stressful, and making sense of all the fine print and complicated details associated with that purchase can become tiring. That said, understanding your options with regard to your homeowners insurance can ensure that you have one less thing to worry about as you begin your journey as a homeowner.