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Homeowners insurance keeps you from financial losses when
disaster strikes your home. A standard policy insures the house
and all the things you keep in it.
Homeowners insurance can be bought as a package policy that
covers the damage to your property and any liabilities or
financial responsibility for any injuries that you may have. It
also protects you when you or your family members cause damage
to other people's property (including damage caused by household
pets).
Damages caused by natural disasters are also covered with a few
exceptions. These are that you must buy separate insurance for
earthquakes and floods. Also maintenance related problems are
wholly the homeowner's responsibility.
A standard homeowner's policy includes four primary and
essential types of coverage.
These are
1) Coverage for the structure of the house This coverage pays
you to repair or rebuild your home if it has been damaged by
hail, fire, hurricane, lightning and any other disaster
specified in your policy. Any damage caused by floods,
earthquake and routine weathering will not be covered. When you
buy coverage, make sure you buy enough to rebuild your house
completely. Structures that stand outside the main structure,
like garages, tool sheds and swimming pools are also covered in
most policies. These structures are generally covered for about
10% of the amount of insurance you own on the structure of you
home.
2) Personal belongings All your personal belongings like your
furniture, electronics, sports equipment, clothes and other
items are covered if they are stolen or destroyed by disasters
like hurricanes, fire or other disasters specified in your
policy. The coverage provided by most companies is around 50% to
70% of the insurance you have on the structure of your home. To
determine if this coverage is enough for your home compile a
home inventory. The off-premises coverage is included in this
part of the policy. The limit for this is sometimes 10% of the
amount of insurance you have for your possessions. Unauthorized
use of your credit cards are covered for up to $500. Expensive
household items like jewelry, silverware and furs are also
covered but incase of theft they have dollar limits. These items
are generally covered for $1000 to $2000. Insuring these items
to their full value will require you to own a special property
endorsement and insure the item for it's appraised value. The
coverage also includes "accidental disappearance" which means
that simple loss of the item will also be covered. There is no
deductible for this.
Also covered here are all your trees plants and shrubs. These
are generally covered for 5% of the insurance of the house - up
to $500 per item. The disasters covered are fire, theft,
hurricane, explosion, lightning, vandalism, riot or even falling
aircraft. Coverage for wind and disease are not part of the
plan.
3) Protection of Liabilities This coverage protects you against
lawsuits for bodily injury or damage of property that you or any
of your family members cause to other people. It also includes
damage caused by your pets. So, if your child or dog
accidentally breaks your neighbor's vase, you are covered.
However if they break your vase, you are not covered. The
liability part of you policy means that your policy pays for
both the cost of defending you in court and any court awards- up
to the limit of the policy. You will be covered anywhere in the
world and not just your home. Liability limits generally begin
at $100,000. But experts recommend that you purchase a liability
of $300,00. All policies also provide no-fault medical coverage.
In case your friend or neighbor is injured in your house, he or
she can submit their medical bills to you insurance company.
Expenses can thus be paid without them filing a liability case
against you. This coverage is generally worth $1000 to $5000. It
does not pay medical bills for your family or your pet.
4) Additional Living Expenses If you are living away from home
because your home has been damaged in a fire, storm or other
insured disasters, the expenses will be taken care of by your
Insurance company. Hotel bills, restaurant meals and other
living expenses that are incurred while your house is being
repaired. This coverage differs from company to company. Many
policies provide 20% of the insurance on your house as this
coverage. This can, however, be increased for an additional
premium. Some companies provide policies that provide you with
unlimited amount of loss-of-use coverage but restrict it to a
limited amount of time.
If part of your house was rented, the insurance company will
also compensate you for rent lost by you. |
