Do You Know What To Look For In A Homeowner’s Insurance Policy?
A standard homeowner’s insurance policy includes four essential types of coverage:
- Coverage for the structure of your home
- Coverage for your personal belongings
- Liability protection
- Additional living expenses
The Structure of Your House
This part of your policy pays to repair or rebuild your home if it is damaged by fire, hurricane, hail, lightning or other disaster listed in your policy. It will not pay for damage caused by a flood, earthquake or routine wear and tear. Most standard policies also cover structures that are detached from your home.
Your Personal Belongings
Your furniture, clothes, and other personal items are covered if they are stolen or destroyed by fire, hurricane or other insured disaster. This part of your policy includes off-premises coverage. This means that your belongings are covered anywhere in the world, unless you have decided against this coverage. Expensive items like jewelry, furs and silverware are covered but there are dollar limits if they are stolen. Trees, plants and shrubs are also covered. Perils covered are theft, fire, lightning, explosion, vandalism, riot and even falling aircraft. They are not covered for damage by wind or disease.
Liability Protection
This covers you for lawsuits for bodily injury or property damage that you or family members cause to other people. It also pays for damage caused by your pets. The liability portion of your policy pays for both the cost of defending you in court and any court awards – up to the limit of your policy. You are covered anywhere in the world. Your policy also provides no-fault medical coverage.
Additional Living Expenses
This pays the additional costs of living away from your home if you can’t live there due to damage from a fire, storm or other insured disaster. It covers hotel bills, restaurant meals and other living expenses incurred while your home is being rebuilt.
Note: You should talk with your insurance agent about specific coverages, policy limits, inclusions, exclusions, premiums and other policy details. You should arrange to have your homeowners policy well before settlement of your home. When negotiating your policy, you should purchase Guaranteed Replacement Cost Insurance.