Homeowners insurance is an insurance policy that offers financial protection against risks such as vandalism, theft, fires and lightning. Standard homeowners insurance policies come with different coverages, depending on what your individual needs are.
Coverage differs from one homeowner to another, so it’s possible for each person to customize their own policy. This usually depends on budget, priorities of the homeowner and value of the property. If you want help from one of San Bernardino’s top financial planners, feel free to read more.
So, What Does Homeowners Insurance Actually Cover?
There are four important coverages that are included in a basic homeowners insurance policy:
Dwelling And Other Structures
Homeowners Insurance pays for the cost to repair a house that has been damaged by lightning, fire, a hurricane and/or other perils listed in the policy. This basic coverage insures the physical structure of the home in which the insured person lives, plus any attached structures like a garage or deck. Additionally, detached structures that are on the property such as a gazebo, fence and tool shed are also insured.
Loss Of Use Coverage
Also known as Additional Living Expenses Coverage, this particular coverage caters for additional costs of living incurred while the homeowner is living away from home, such as in a hotel or other lodging, due to damage from an insured peril. It would cover the amount of time that the house is being repaired. Loss of Use coverage pays for these additional living expenses that are incurred above the usual living expenses. It also includes rent not earned in case a part of the insured home was rented out to a tenant.
Personal Property Coverage
Personal property such as clothes, furniture, sports equipment, jewelry, art and collectibles are covered in case they are stolen or destroyed by fire or any other insured risk. The coverage is usually about 70% of the insured amount on the homeowner’s policy. To get sufficient coverage for personal property, it is wise to conduct and keep a home inventory.
Personal Liability Coverage
This covers the homeowner against a financial obligation for property damage or bodily harm that the homeowner or his/her household members caused to other people. It includes damage or injury caused by the homeowner’s pet to a neighbor, for instance.
Essentially, it protects the homeowner and their household in the event of a claim for either property damage or bodily harm to others. It also includes a no-fault medical coverage for a person injured while on the insured property.
Limits And Deductibles
Every coverage in the homeowners insurance policy is subject to a certain limit. This simply means that there is a maximum amount that the insurance company can pay to cover a loss. Deductibles refer to the part of the covered claim that is the homeowner’s responsibility.
Risks Not Covered With Homeowners Insurance
The most basic homeowners insurance policies cover events such as tornadoes, hurricanes and lightning. However, acts of war and some acts of nature, such as earthquakes and floods, are usually excluded from the policy. It is possible to get special coverage to insure property against these natural disasters and other additional perils.
There are many more additional homeowners coverage policies. Different insurance plans provide protection against different risks. These coverages serve as safety nets in case the unexpected occurs in and around people’s homes. Make sure to do your research and talk to your auto insurance agent so you can better understand what’s included in the policy. It’s also very likely that they can combine your new homeowners insurance with your auto insurance for a cheaper rate.