Important Things To Know About Homeowner's Insurance
Why Is It Important To Have Homeowner's Coverage?
Homeowner's Insurance offers protection for damage or loss caused by storms, fire and theft. It can also provide protection for your valuable possessions. It is imperative to prepare for the unexpected when there is a chance that lack of protection can lead to financial hardship. In short, where there is a financial interest, there should be a specific policy in play to minimize the potential of suffering from great financial loss.
What A Basic Homeowner's Insurance Policy Should Look Like
Though all insurance policies are fully customizable, depending on your budget, there are certain elements that exists in a basic homeowner's policy. Your agent will usually work with you on determining how much coverage you'll need, as you would want to make sure that you also have sufficient coverage to ensure the repair or replacement of your home if you should experience a covered loss.
Dwelling Coverage
A basic homeowner's policy usually includes Dwelling coverage. This coverage can be used to repair or rebuild your home due to damage resulting from fire, smoke, theft or vandalism or by inclement weather such as lightning, wind or hail. You would want to ensure that also have enough coverage for this repair or replace your home in any of these events.
Other Structures Coverage
This is coverage provides protection for structures other than home, such as a fence, if they are damaged by a covered peril or risk. If a tree falls on your detached garage, other structures coverage may be used repair or replace it.
Personal Property Coverage
Personal property coverage can cover your belongings, such as furniture, clothing, sporting goods or electronics, in the event of a covered loss. Whether your personals items are damaged in your home or anywhere else in the world, they could potentially be covered. Note: Always ensure that you are aware of any items that are excluded from your policy.
Liability Coverage
This type of coverage helps protect you if you or a family member are sued for accidental injury or property damage. An example of this would be if someone is injured in your home and you're found legally responsible, liability coverage can help cover costly legal defense fess, settlement fees and more.
What Basic Homeowner's Insurance Policies Do Not
Cover
Specific types of damage or loss that your homeowner's insurance won't cover may be listed on your policy as exclusions.
In this case, the insurance will deny your claim if you experience these losses. Most policies come with a variety of exclusions.
Floods
Damage caused by floods is almost always a common HO-3 policy exclusion, but even homeowners with an HO-5 policies, which provide broader coverage than HO-3 policies, are likely not covered for flood damage. Typically, you will need to purchase a separate flood insurance policy.
Earthquakes
Earthquakes can cause much harm to home structures than most other events. They can damage housing foundations and collapse walls. This may be excluded from your homeowner's policy but can be covered by purchasing a flood policy.
Other Exclusions
Ground movement, mold, wear & tear, infestations, nuclear hazards, government action, dangerous and/or aggressive dogs, wind damage in hurricane prone states, intentional loss and/or neglect and other common exclusions can normally be purchased as separate policies or add-ons.