Your home is probably one of the largest investments you’ll make in your life. Homeownership comes with many benefits, not to mention the pride of owning your own house. However, there are some more complicated aspects of being a homeowner (besides figuring out what color to paint the kitchen.) One of those complicated things is buying home insurance. You might be wondering what exactly homeowners insurance covers and how it protects your house. We’ll go over five different areas that home insurance covers and explain how home insurance protects your home.
1. Your home.
Okay, obviously homeowners insurance protects your home. What we’re talking about is the dwelling or structure of the house itself. Your home insurance will protect against damage to your house that’s caused by covered losses such as fire, vandalism, lightning, and hail. We say covered losses because certain things are excluded from home insurance. For example, flooding is typically not covered, and neither are earthquakes. It’s important to read your policy carefully so you know what is and is not covered.
Now, as far as how much property coverage you need, it’s a good idea to insure your home for its replacement cost, which is the cost of rebuilding your home from the ground up like you would have to do if it were destroyed by a fire. Those extra expenses associated with rebuilding can add up, so it’s important to have enough insurance to cover them.
2. Other structures.
Your homeowners insurance may also include coverage for other structures, meaning detached structures like garages and sheds. This would also account for fixtures that are attached to your land, like your driveway, sidewalk, fence, or patio. However, you may have a limit for these other structures. For example, you might get ten percent of the coverage you have for your home.
3. Personal property.
This section of your home insurance covers the contents of your house – your furniture, electronics, clothing, and other personal property. The personal property chunk of your insurance will protect your belongings against losses like fire and theft, along with other covered losses. It will even cover your belongings if they’re not in your home – for example, if you have some possessions in your car and they get stolen.
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It’s a good idea to take a home inventory so that you know exactly how much homeowners insurance you need for your belongings. A home inventory is essentially a list of all of the belongings in your home and your value. It can also help you if you ever have to file a claim because you’ll know exactly what to claim.
Pro tip: Insure your personal property for its replacement cost value. This will allow you to replace your belongings at today’s prices. If you insure your belongings for their actual cash value you will only get their value at the time of the loss (meaning their depreciated value, which may not be enough to replace them.)
4. Loss of use/Additional living expenses.
If you experience a loss to your home and you are unable to keep living in your house, your insurance may also cover expenses above your normal living costs that you log because you had to move out (for example, hotel bills and eating at restaurants.) Your policy may have a limit for these expenses, so be mindful of that.
Liability coverage will cover the costs of lawsuits that arise if you or your family cause someone bodily injury or property damage. It takes care of the litigation expenses and any court-ordered awards you have to pay. So, if the mailman gets bitten by your lovely, wouldn’t-hurt-a-fly dog, your liability could help cover you if the mailman sues. Yeah, dogs can affect your home insurance rates for that very reason.
Another thing to think about is medical payments coverage. With medical payments coverage, the injured person can submit their medical bills to your insurance company. That way they get their medical bills paid without a liability claim filed against you.
Pro tip: If you have many assets and you want to have higher levels of liability coverage, you can consider personal umbrella insurance.
So, as you can see, homeowners insurance covers way more than meets the eye. The dwelling, other structures, your personal property, additional living expenses if you have to move out because of a loss, and your liability are all covered. That being said, we encourage you to take the time to study your home insurance policy. Don’t be shy. Introduce yourself and become best friends. It’s essential that you know what your policy covers and what your limits are. Nasty surprises are the worst, especially where insurance is concerned.
If you want to save money on your home insurance, we can help. Our team of insurance agents are experts at helping homeowners shop for the best coverage at the best rate. We’ll help you make sure that you have the coverage you need to fully protect your home. To get home insurance quotes, just fill out our online form or give us a call today. We’re here to help with your insurance needs.