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  • Sherise Benton

What You Should Expect Your Home and Property Insurance to Cover


Home insurance, which is commonly called homeowners insurance, is a type of insurance you take to protect your home or the precious items you have in it. This type of insurance provides financial protection for you should, in case something terrible happens.


To fully understand what home insurance is, you need to learn what it covers, how it operates, and how to make sure your insurance policy is truly protecting you.


What is a homeowner's insurance?


Homeowner's insurance comprises several coverages designed to help repair or replace your home and its belongings if something were to happen to them. These perils include fire, theft, or natural disasters. Such insurance policies may also cover the cost if you accidentally damage another person's property or if a visitor gets injured in your home.


Home insurance property is a multi-line insurance policy. That means that it includes both property insurance and liability coverage, with an indivisible premium. In such policies, a single premium is paid for all risks.


An insurance policy is a legal agreement that exists between the insurance company and the named insured. It is a contract that is supposed to put the insured back in the state they were before their loss. Because of this, insurance companies take an evaluation of what the insurer possessed while taking the insurance. This way, they know what they are expected to replace in case of an accident or disaster.


The cost of residential house insurance

Several factors influence the cost of your home insurance policy. The first factor usually is the coverage a home insurance owner select; after this, other factors such as the features of your home and the value of your personal belongings. If insufficient coverage is purchased to rebuild the home, the claims payout may be subject to the co-insurance penalty. In this scenario, the individual claiming the insurance policy will be subject to an out of pocket fee as a penalty. This is one of the reasons why This makes it very important that you have a policy with sufficient coverage that completely protects you should something happen.


What does homeowner insurance cover

Homeowners insurance typically helps cover

  • Your home

  • Other structures around your property

  • Personal property

  • Liability for injuries or damages to someone else's property.

Asides these coverages, you can also purchase additional policies for greater protection.


When selecting your homeowner's insurance policy, there are four essential types of coverages available. You have the

  • Coverage for the structure of your home

  • Coverage for your personal belongings

  • Liability protection

  • Coverage for additional living expenses

1. Coverage of the structure of your home

For this policy, your insurer pays to repair or rebuild your home if it is damaged or destroyed by fire, hurricane, hail, lightning, or other disasters that you will find listed on your policy. It is important to note that not all-natural disasters are covered by homeowner's insurance. For example, insurance against floods or earthquakes is not typically covered by homeowner's insurance. To get protection against such disasters, you will need a separate insurance policy.


Most coverage packages also protect detached structures of your home, such as the garage, the tool shed, etc. for about 10% of the insurance you have on the main house structure. When taking this policy, you should note that a standard policy will not pay for the damages caused by floods, earthquakes, or natural wear and tear. It would be best if you remember these few guidelines before concluding on what package you'd prefer. You should also purchase enough coverage to rebuild your home if something bad happens.


2. Coverage for your personal belongings

A home is not only about a building but may involve the properties in a building such as a furniture, clothes, sports equipment, and other personal pieces of equipment. This type of policy protects your properties if destroyed by fire, hurricane, or other insured disasters. This coverage is typically 50 to 70 percent of the insurance you have on the property.


You can find out if this is enough by conducting a home inventory. For your personal belongings coverage, other items stored off-premises are also covered. This means you and the personal belongings listed in the policy are covered anywhere in the world. However, some companies limit the amount to 10% of the total insurance amount you have on your possessions.


For expensive items such as your jewelry, arts, furs, collectibles, silverware, usually have a dollar limit if they are stolen. When insuring such items to their complete value, homeowners need to purchase a personal property endorsement or floater and also ensure you insure the item for its official appraised value.


Lastly, your plants, trees, and shrubs are also covered under a standard homeowner's insurance policy. However, your insurance policy wouldn't take care of these plants if they get a disease or aren't properly managed.


3. Home Liability Insurance

Liability covers you against lawsuits for bodily injuries or property damages that you or any member of your family causes to other people. Your liability protection also covers the damages caused by your pets. So if your daughter, son, husband, wife, or pet accidentally breaks a neighbors fence or injures someone, you are covered. Note: in this insurance policy, you or your property isn’t covered if it’s the neighbor doing the damages.


Your insurance policy's liability portion pays for both the cost of your defense in court if need be, and the court awards up to the limit stated in your policy document. The liability limit general starts at about $100,000. Nevertheless, it is a good idea to discuss whether you will need a higher level of protection with your insurance advisor. If you have significant assets and will like to get more coverage than your insurance policy provides, you should consider an umbrella or excess policy. Such policies provide broader coverage and higher liability limits for your assets.


Your liability protection policy also provides no-fault medical coverage. This policy kicks in if a friend or neighbor is injured in your home. In such cases, he or she can submit the medical bill to your insurance company. Your insurance company will then pay the medical bill. This way, the expenses will be paid without filing a liability claim against you, the homeowner. Note: this policy wouldn't pay the medical bills for your own family or pets.


4. Additional living expenses (ALE)

ALE pays the additional cost of living away from home when the damage from an insured disaster is too severe and has made the home unfit for living. This type of insurance covers your hotel bills, restaurant meals, and several other costs you incur while your home is being rebuilt. Many times ALE insurance is limited, and some of its policies have a time limitation. You shouldn't worry, considering that these limits are separate from the amount available to rebuild or repair your home. Even when you’ve used up your ALE, your insurance company will bear the full cost of rebuilding your home up to your policy limit.


This also covers rental home insurance cost. ALE also covers you for the rent you would have collected from your tenant before your home was destroyed.


Coverage limits and deductibles

With the term coverage limits and deductibles coming up so often, we feel it would be best if we explained what they mean. Before we begin, you should note that each coverage in a homeowners insurance policy is subject to a limit. This limit is the maximum amount your policy or the insurance company will pay when covering a loss or damage. You can also adjust your coverage limits to suit your needs after considering certain elements such as the value of your home, belongings, and the cost to repair or replace then should anything happen to them.


Most times, you may have to pay your deductibles before your insurance claim is approved, and your policy kicks in to help cover your loss. Before finalizing any of the home insurance, ensure you go over your policy and contract with your insurance agent to review your coverage limits and deductibles. After doing this, you can adjust them to fit your needs.


The protection offered by homeowners insurance is a safety net insurance policy. In areas prone to natural disasters or likely to happen accidents, homeowners rely on these policies to soften the blow. In case something bad happened, these homeowners know that they wouldn't have to start all over again from ground zero.


As a home insurance owner, you now know what your insurance policy should cover. However, it is wise to get an insurance agent to help you select the best type of policy for you and the types of coverages and limits that serve to benefit you best.

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