Homeowner’s Insurance

Homeowner’s InsuranceThere are different types of home insurance policies available, depending upon your particular needs. Most homeowners opt for coverage of the property, contents, and liability, at a minimum.

The first important part of homeowner’s coverage to consider is the structure itself. Structural insurance policies will pay to repair or rebuild your home if it is damaged by such things as fire, hurricane winds, lightning, hail, or other covered disaster. The coverages should be specifically listed in your policy. Flooding is not covered (and be careful, while hurricanes may be, usually only the part of damage determined to be caused by winds and rain will be covered and not any portion assigned to flooding), and usually such things as earthquakes are excluded as well.

Coverage for the structure will generally also cover detached structures, such as garages, storage buildings, and possibly fences. Check your policy and ask specific questions to make sure. These structures are usually limited to a percentage of your overall policy. Do make sure when purchasing structural insurance that the amount you purchase is enough to rebuild your home if necessary, and update your coverage to keep up with rising costs if needed.

Personal belongings are another category of coverage. If your furniture, appliances, clothing, sports equipment, or other belongings are stolen or damaged by fire, hurricane, or other covered disaster, your policy will pay you for them if you elect this type of coverage. Some policies cover replacement cost, but most are limited to an amortized value. Some policies will also cover your belongings anywhere in the world, so if you are traveling or moving, your coverage may still be in effect.

Certain items, especially expensive ones, such as jewelry, furs, pieces of art, and often collectibles and antiques must be covered separately, or they will only be insured up to a certain limit. You should check with your agent to be sure about these. Also, if you own your own business, items which are a part of your business may not be covered under your homeowner’s policy.

Most policies cover plants, trees, shrubs, etc. under this part of the policy if they are damaged by fire, collision, or are stolen. The policy will not pay in case of disease, wind, or water damage.

Liability is another portion of homeowners insurance that can offer important protection. If someone is injured on your property or by your pets, your coverage should take care of the medical bills. If you, your children, or your pets damage someone else’s property, your homeowner’s liability will usually cover this as well. However, the liability coverage will not pay for damages to your own property.

Another category of coverage is additional living expenses. This type of coverage will pay for your extra expenses if your home becomes unlivable due to a covered event. Generally this is to pay for such things as hotel bills and eating out. Sometimes this coverage is included in a homeowner’s policy, and sometimes it must be purchased separately. You can usually purchase extra coverage, and this may be wise if, for example, you are offered this coverage but only for a short time, and you might need some other accommodations while your house is being rebuilt in case of fire.

Coverage for additional living expenses may also reimburse you for part or all of the rent you would receive if you rent your home out, and it becomes unlivable due to a covered disaster.

Certain types of disasters are excluded from almost all homeowners policies, especially flooding. Generally, you must purchase a separate flood insurance policy in order to be protected against flood damage. The availability and cost of such coverage is determined by the rating of your home relative to flood zones.