Homeowner’s insurance is a type of property insurance that provides coverage to losses and damages on people’s property as well as assets in the house. The insurance also provides coverage to accidents that occur in the house or on the property. Property insurance typically includes homeowners insurance, renters insurance, earthquake insurance and flood insurance. In general, it provides protection from fire, theft and some weather damage. It is important to know what exactly your policy covers, and you can typically add additional coverage but at a greater cost.
What Homeowners Instance Covers
Homeowners insurance vary from one provider to another. Coverage also depends on the total amount of money that one is willing to pay for protection. However, coverage often includes:
Property Damage
The essence of any homeowner’s insurance is to provide coverage against the home itself. Almost all policies provide coverage to damage caused by things such as fire, wind or hail. However, most policies don’t provide coverage on damage caused by things such as floods and earthquakes. Homeowner’s insurance provides coverage for the structure itself as well as plumbing, electrical wiring, central air, and heat systems. Some policies also include coverage for other structures that might be on the property, separate from the main house, such as a detached garage, tool shed or fence.
Possession Protection
Homeowners insurance not only provides protection for the physical structure itself but as well as possession inside the house such as furniture and electronics. Personal property protection helps pay for costs that might be incurred for repair or costs for buying new ones in case of vandalism or theft. Some insurers may offer optional coverage, extended to cover items such as jewelry, watches, and furs
Liability Protection
A good number of homeowners insurance provide liability coverage for people who get injured while visiting the insured person. Injury liability protection may help cover for medical expenses as a result of injuries sustained while on the property. The insurance may also cater for legal expenses that might arise because of an incidence at the property. An insurance company is likely to defend the insured against lawsuits that fall under the terms of the policy.
Additional Living expenses
In case a property gets damaged and one is not able to live in it, an insurance company is usually obligated, depending on policy, to cater for living expenses elsewhere until everything is sorted out. This is only applicable in case a home is under emergency renovation as a result of a fire
What Homeowners Insurance Does Not Cover
Flooding
Damages caused on a house or property by flooding is usually not covered by typical homeowner’s insurance. However, most homeowners think that their insurance covers flood damage.
Earthquakes
Private insurance rarely provides coverage against damages caused by earthquakes. While the earthquake is normally an issue in areas with a high risk of trembles, one can take a separate cover for protection.
Simultaneous Events
An insurance company may refuse to offer protection if two simultaneous events occur and one of them is not covered. What this means is that if a strong wind destroys a property and consequently followed by flooding, an insurance company might turn down a claim.
Total rebuild
Homeowner’s insurance come with caps, which limits the amount of money that an insurance company can pay in case a home is destroyed. Some policies don’t cover the full cost of rebuilding.
Resources:
1. https://www.iii.org/article/what-covered-standard-homeowners-policy
2. https://www.allstate.com/tr/home-insurance/covered-in-homeowners-policy.aspx
3. https://clark.com/homes-real-estate/10-things-home-insurance-wont-cover/
4. https://www.investopedia.com/terms/p/property-insurance.asp
