Being well-versed in homeowners insurance basics is essential to becoming a top-selling insurance agent. Potential clients want the best protection for their investment without breaking their budget. The average home insurance buyer considers four things when purchasing a policy: the price (premium), the amount of protection, the agent's knowledge and friendliness, and homeowners insurance ratings.

A homeowners insurance rating depends on the company's financial security versus its liability. The highest rating is AAA, which means the company's financial security characteristics are extremely strong. The next highest rating is AA, then A, followed by BBB, BB, and so on through C. A rating of R means the company is under regulatory suspension and NR means the company hasn't been rated. It's important to know your company's rating and how it earned it. When learning the basics of homeowners insurance, know the following:

1. All homeowner insurance plans cover the structure of the home.

2. Personal property insurance has limits of liability.

3. Liability insurance covers the clients even if they are responsible for harm.

4. Adding guest medical coverage pays for medical expenses if someone sustains an injury on the property.

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Cover a home's structure with a homeowners insurance plan

Structure insurance covers damage a house sustains during a natural disaster. The insurance limits should cover the amount of money it would cost to rebuild the home, taking into account current construction costs. This could be more or less than the home's value, so don't base the insurance limit on an appraisal.

I recommend: Read more about covering the structure of a home, including how to estimate the amount of coverage needed at the Insurance Information Institute. For basic information on structure insurance, visit Erie Insurance.

Protect personal property with homeowner insurance

While structure insurance pays to rebuild a home, personal property insurance reimburses the client for damaged or stolen valuables. Take into account the client's personal situation when conducting a home insurance comparison. Some companies will cover a wedding ring if the client's toddler flushes it down the toilet, while others will only reimburse if the homeowner files a police report.

I recommend: Read more about insuring personal property at CompuQuotes. The homeowners insurance comparison company provides information on limits of liabilities for common belongings found in the home. For tips on how to inventory personal property, visit the Alabama Cooperative Extension Program.

Offer a homeowners insurance policy that covers the client if they're found negligent

When clients compare homeowners insurance policies, they may ask about coverage if their negligent behavior results in harm. This type of protection is liability insurance. The best homeowners insurance will pay for the client's legal representation and the injured party's medical expenses if, for example, their dog bites the mail carrier.

I recommend: Read the answers to frequently asked questions about liability insurance at MetLife. The American Bar Association offers an explanation of liability insurance and the type of liability insurance an average homeowners insurance plan covers.

Include a clause in the homeowners insurance policy that extends to guests

Guest medical protection covers a person's expenses if they sustain an injury on the client's property, even if it was by no fault of the client. A friend breaking his arm while playing football in the backyard is an example of when this type of coverage would be necessary.

I recommend: Learn more about guest medical coverage by visiting Allstate. Take note of the list of reasonable medical expenses clients can expect an insurance company to reimburse. Find a definition of guest medical coverage, as well as several other insurance terms, at InsureSense.Com.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Adding an alarm system or replacing a furnace lowers the cost of insurance, so always ask potential clients if the home has any safety upgrades when they want homeowners insurance quotes.

Comparing homeowners insurance rates is the first steps in protecting your home, home-based business or the homes of your clients. You'll be ready to select the best homeowners insurance plan for your family, your business and your budget once you have secured homeowner insurance quotes from a few reputable companies. Not only are you protecting yourself by getting several quotes and examining all plans meeting your criteria, you are protecting an industry from theft, damage, destruction and crime.

Homeowners insurance can be a fickle friend with so many choices, policies and laws governing insurance, so help your clients by offering the best insurance policies available. Protect your home-based business with a solid home insurance plan or include business protection in your existing home insurance policy.

1. Offer the best insurance

2. Protect your home-based business

3. Include business protection in your plan

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Check homeowners insurance ratings and coverage

Decide on a secure, smart and highly rated insurance company to work with in providing high-quality, solid home insurance to your clients. To check out an insurance company you are interested in use references and home insurance comparison. Homeowners insurance quotes are available at most every homeowners insurance company sites, homeowners insurance rates are also available with agent consultations.

I recommend: AIG Direct offers a home insurance plan called HomeSite, which provides insurance to home owners, renters and condo owners. Allstate has been around since 1931 and offers many different plans to accommodate the housing situations of your clients. They also offer discounts for certain situations. Print out policy information for a homeowners insurance comparison.

Protect your home-based business with the best homeowners insurance

Homeowners insurance will cover a large gamut of the things that can happen to jeopardize your home-based business, like burglary, fire and flood, but it may not be enough. The average homeowners insurance policy covers $2500 in business equipment while at home and only $250 when off the premises.

I recommend: Wells Fargo offers a Business Owners Policy that can be customized to fit the needs of your business. The coverage includes property protection and various liabilities coverage. Nationwide Insurance also offers a great small business owner's insurance policy which also includes crime coverage.

Include business protection in your homeowners insurance plan

Protect your business assets, equipment and profits with an insurance rider on your homeowner insurance. There are an assortment of riders to choose from including limited liability and limited coverage for loss of valuable documents.

I recommend: Add an endorsement to your homeowners policy. For around $20 a year, you can double your coverage and extend the liability coverage. With the AARP's Auto & Home insurance program from The Hartford, consider an in-home business insurance policy, which can mean the difference between a destroyed laptop and no laptop. Check out homeowners insurance ratings through various service providers listed on FreeAdvice.com.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  When insuring a home-based business, make sure to research federal and state level laws regulating homeowner's insurance in your state and on a federal level to find any loopholes or problems that could arise should you need to file a claim.

Educated and licensed agents provide homeowners insurance. In order for these individuals to provide services, they must obtain an insurance provider's license, issued by the state in which they practice. Obtaining education and training in this field is vitally important to passing a licensing exam.

Individuals who wish to give homeowners insurance quotes, sell insurance or aid individuals in claims can obtain proper training in several ways. Keep the following in mind when considering educational goals:

1. Learn how to provide an accurate, legal homeowners insurance quote.

2. Provide services for homeowners insurance comparisons after learning how to accurately access the client's insurance needs.

3. Get information on homeowners insurance rating methods and calculations.

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Find requirements to provide homeowners insurance

To work in any capacity in the insurance business, individuals need to have the right training as required by the state they practice in. For home insurance, compare the requirements of insurance agents, depending on the type of degree obtained.

I recommend: Check with the state's insurance department for state requirements for licensing. The California Department of Insurance outlines the various license types and their requirements. Other states will list insurance requirements with their commerce department. The State of Hawaii lists information at the Department of Commerce & Consumer Affairs. Comparing homeowners insurance training should be done based on the type of license needed, including producers, service contract providers and brokerages.

Perform homeowners insurance comparisons on educational opportunities

Getting a degree to provide homeowner insurance can occur in several ways. Some insurance companies provide training directly to their potential employees through internships. Some prospective employees elect to enroll in schools to get formal insurance training.

I recommend: Gather information and training on homeowners insurance ratings, rates and much more by enrolling in the right school. Some insurance providers, such as State Farm Insurance, provide a six-to-nine month internship for licensing, fundamental development and the development of management skills. Other schools provide insurance licensing courses directly to interested individuals. Gold Coast Schools provides these courses in the state of Florida.

Meet average homeowners insurance continuing education requirements

To keep providing home insurance, or any insurance services, most states require individuals to have continuing education. For home insurance comparison of continuing educational opportunities, individuals may look to the local schools providing licensing training. Online schools may also provide adequate training to meet state licensing requirements.

I recommend: Continue homeowners insurance education and training through state approved schools. One option for continuing education is to use an online service like WebCE. This provider is approved in all states to provide self-study continuing education. Kaplan Financial Education offers continuing education for current licensed insurance providers.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Prior to getting a license education, contact local homeowners insurance providers with employment opportunities available. Many will pay some of the training and education. Then, they hire licensed individuals to handle everything from homeowners insurance comparison tools to homeowners insurance rates for customers.

Homeowners insurance key terms are important to know if you want to make sure you are getting the best policy for your money. You need to understand your level of coverage and whether it is enough to replace your home in case of a total loss. It is as important that you make sure special items, such as jewelry and business equipment, have special endorsements.

You should also understand the amount of your deductible. You don't want it to be too high, because you must be able to absorb it if you have a claim. Finally, carefully review the information on the declaration page, which lists the important points of the policy. You want to be sure it is accurate and covers everything you and the agent have discussed.

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Level of protection or coverage

Your mortgage company will insist on a certain level of protection or coverage for your home. However, they demand just coverage for the replacement of the home, which doesn't take into account your possessions or inflation.

I recommend: Agencyinfo.net explains the various levels of protection or coverage that your homeowners insurance may offer.

Special provisions and endorsements, riders and schedulers

Special provisions cover your more valuable possessions, including jewelry, antiques or computers.

I recommend: Insure.com provides information about special provisions.

Incidental occupancy

Incidental occupancy is the use of a residential home for purposes other than living -- for instance, use as a studio or home office. To qualify for this coverage, the residence must primarily be a home. The only incidental occupancy you can have is the one specified in the policy.

I recommend: Mather & Pitts explains the concept of incidental occupancy.

Deductible

A deductible is the amount of money you will be responsible for if you file a claim. For every claim you put in, you have to pay the deductible. For instance, say you have a policy with a $500 deductible and there is a theft in your home that amounts to a $3,000 loss. You are responsible for the first $500, and the insurance is responsible for the difference.

I recommend: LendingTree offers advice on choosing the right deductible.

Claim

A claim is a request for a loss you have suffered. In the case of homeowners insurance, the loss might be due to a theft or fire in your home.

I recommend: Surf Rate explains what a claim is and how to file one.

Declaration page

The declaration page is usually the first page of your homeowners insurance policy. It contains the name and address of the insured, the amount of coverage, a description of what is covered, and the cost of the policy.

I recommend: Danny Lipford gives advice on understanding the declaration page.