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 “Stuff” Does Homeowners Insurance 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 Homeowners Insurance 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 homeowners insurance quotes today.
