Some people simply purchase homeowners insurance online. Others will seek out a local agent. It’s your choice. But with either decision, you need to understand the basics of homeowners insurance. The cheap insurance store is always helping you shop for homeowners insurance.
Homeowners insurance protects us against certain things that can happen. And these “things” or “perils” will be named and listed in your policy. Also listed are certain “exclusions” which are things you are not going to be covered for.
As you read your policy you are going to see one section for “property protection” and another for “liability protection”.
Your “property protection” is going to list the dwelling, other structures, personal property and loss of use.
The dwelling covers your house, your fixtures such as built-in appliances, plumbing, heating, and air conditioning. Make sure your “dwelling insured value” covers the cost to replace your home. NOT the current real estate value. They are NOT the same!
Other structures refers to such detached structures such as your garage, a storage shed and things like fences. It also refers to driveways and sidewalks. Also know that these detached structures used for business purposes are not normally covered under your homeowners policy.
Personal property is the contents of your home and personal items belonging to you and the people who live in your home. Read your policy carefully here because it can get confusing about what items are covered.
Loss of Use refers to your living expenses. These over and above your normal living expenses if you cannot live in your home while repairs are being made.
There are also additional property coverage policies that may pay for such things as debris removal, damaged trees and shrubs.
Furthermore, you can have endorsements added to your home owner policy at an additional cost to provide extra protection.
Examples of endorsements include guaranteed replacement cost of your home and extended replacement cost. This would cover cost overruns over a specific amount and inflation guard protection. Inflation guard will increase the amount of your home owner insurance to keep up with inflation.
Scheduled personal property will protect things such as jewelry, furs, stamps, guns and antiques. These items often exceed normal policy limits in your home owners policy. Theft coverage protection expands your theft coverage to include personal contents in motor vehicles.
Personal liability protects you against a claim or lawsuit resulting from bodily injury or property damage to others caused by an accident on your property or as a result of your personal activities anywhere.
This home owner insurance coverage does not provide protection for car and business related incidents. The Medical Payments section is coverage to pay medical expenses for persons injured on your property regardless of fault. Medical expense payments do not apply to your injuries. Or injuries of family members living with you or to activities involving an at home business.
Every home owners policy has exclusions. A typical home owners insurance policy does not cover injuries to animals, damage to motor vehicles, aircraft, and parts.
Nor do they typically cover losses due to floods, mudslides or water damage from sewer backups. It also doesn’t cover damage resulting from war or nuclear hazard, neglect, earthquakes, power failures or vermin.
Homeowner insurance does not provide general free legal advice under the liability portion of the policy.
All home owners policies have different covered perils and exclusions. Therefore, one will need to check with their insurance company to verify their individual policy.