What is Home Owners Insurance?
Homeowners insurance is much more than a product you have to buy to satisfy requirements to get a mortgage. Homeowners insurance is asset protection; it is the product that allows you to regain the use and value of your family's most important asset when it is damaged.
What Does It Cover?
Most forms of homeowners insurance will cover the cost to repair or replace damage to your home's structure and other structures on your property, such as a storage shed or detached garage. In addition to structures, homeowners insurance also covers your personal property (think of this as “stuff” that would fall out of your home if turned upside down). Coverage for personal property that is taken off-premises may be included, but is often limited.
Your homeowners insurance also will pay expenses resulting from the loss of use of your home due to a covered loss. For example, if your home is uninhabitable due to a fire, your homeowners insurance will help pay costs for you and your family to relocate and live somewhere else while your home is being repaired.
In addition to property, your homeowners insurance will pay claims for bodily injury or property damage to a third party for which you or a member of your household is legally liable. This coverage is extremely valuable, especially for parents with young children (think of when your children's friends come over to play). In most policies, your liability coverage applies worldwide; it is not restricted to your home's premises.
What Types of Losses Does It Cover?
Homeowners insurance covers a variety of different situations that could cause damage to your home and its contents. Known as “perils,” these situations can include fire, windstorm, theft and vandalism.
An understanding of the types of losses covered by your homeowners insurance is essential – following a loss is not the time to find out a peril is not covered. Keep in mind that some types of losses, such as earthquake and flood, require a separate insurance policy.
Be Aware of Coverage Limitations!
There are penalties for not carrying enough insurance on your home at the time of a loss. Limits should be checked and updated frequently. Also, keep in mind that additions to your home may not only affect your home's value, but may not automatically be covered. Always check with your insurance company before making a significant alteration to your home, such as the addition of a new room.
Most homeowners insurance policies will not cover certain types of personal property. Other types of personal property are covered but limited, such as money, valuable papers and items of significant value (i.e., jewelry, art, collectibles, etc.). It is important that you contact your insurance company or agent to discuss the policy's limitations, including if and how coverage can be obtained.
Now it's time to research the best policy for you, start by getting your free insurance quotes today.