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Homeowners insurance provides financial protection in the event that your home or its contents are damaged. It also provides protection if you or a family member are held legally responsible (liable) for the injuries to others or damage to their property. It’s also required by most mortgage lenders.
Insurance policies that cover your home come in all sorts. They range from a basic policy, to those that will provide a much broader range of protection. Not all policies and coverages are available in all states.
One thing to consider about homeownership is the knowledge that your house could be damaged without warning and under any circumstance. One of the basic coverages of a home owner’s insurance policy is dwelling protection, which helps cover the structure of the home in which you live, as well as other structures that are attached to it, such as a garage or a deck, against certain risks.
Homeowners insurance coverage doesn’t just help cover damage to your home, but it may also provide coverage for your valuables. Suppose your electronics are stolen from your home or your furniture is damaged by a fire. Personal property protection may help pay to repair or replace your belongings if they are damaged by a covered risk.
A typical home owner’s insurance policy provides liability coverage when someone not living with you is injured while on your property. Suppose a visitor trips over your broken porch step. Bodily injury liability coverage may help pay for your resulting legal expenses or the visitor’s associated medical bills if you are in the wrong.
Earthquakes, sinkholes and other earth movements unfortunately are not covered by your standard policy. Earthquake insurance can be purchased as an add-on for an additional fee depending on your insurance company policies. Flood insurance, also lies on the same faith. Other types of water damage are also excluded. If you have overflows or backups from your sump pump, sewer system or drains, your standard policy will not cover the damage. Coverage is available, however, by adding a separate endorsement. So you will have to make due with those charges.
Taking proper care of your home can keep you from having to pay for costly repairs your homeowners insurance won’t cover. Many things that aren’t covered under your standard policy typically result from neglect and a failure to properly maintain the property. Termites and insect damage, bird or rodent damage, rust, rot, mold, and general wear and tear are not covered. Damage caused by smog or smoke from industrial or agricultural operations is also not covered. If something is poorly made or has a hidden defect, this falls under the inherent vice exclusion and won’t be covered. The same applies to any mechanical breakdown. Additionally, if your home should suffer a power outage, things like food spoilage are not covered under a standard policy.
Minimal coverage is provided for the following. For additional coverage, endorsements can be added to your policy.
Valuable property – watches, silverware, and gold.
Replacement cost – Most policies use an actual cash-value basis to determine the settlement amount of any lost or damaged items, which takes into consideration depreciation. A replacement cost endorsement can be added to a policy, which will pay claims based on the cost to replace certain lost items without factoring in depreciation.
Higher liability and medical payments- Liability for the medical expenses of third parties and legal bills for defence against claims can be astronomical. Increasing your liability policy limits can protect your financial future.
Insurance is a very vital criteria in one’s house. It can also be very complicated so make sure to pay attention to the small details so things do not go out of hand in the case of an emergency or a natural disaster.
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