What does homeowners insurance cover? A thorough understanding of your homeowner’s insurance coverage can make the difference between being able to repair your home and replacing your personal possessions after a natural catastrophe or other disasters. To learn more about the protections provided by your homeowner’s policy, keep reading! This article will discuss the essential coverage of homeowners insurance.
What Is Homeowners Insurance?
Homeowners insurance consists of coverage that can assist in repairing or replacing your home and valuables if they have been damaged by identified hazards like fire or theft. The coverage may also help you pay for damages you cause to someone else’s property or the medical bills of a guest who is harmed in your home.
What Does Homeowners Insurance Cover?
Homeowner’s insurance policies typically include at least six sections defining types of coverage, according to the National Association of Insurance Commissioners (NAIC). In most cases, a homeowner’s insurance will cover:
The Structure of the Home
This section of the insurance is sometimes referred to as “dwelling coverage” because it covers the structure of the home itself, which includes the walls, floors, doors, and roof. Your home’s foundation and other sections that aren’t always visible are also protected. If your house is damaged or destroyed by a hurricane, fire, hail, lightning, or any disaster mentioned in your policy, your homeowner’s insurance will cover the costs of repairing or rebuilding it.
Coverage for other structures on your property, such as a tool shed, garage, fence, or gazebo, is usually included in most homeowners’ insurance policies. In most cases, the coverage for other structures costs around 10% of the dwelling coverage.
Homeowners’ insurance also covers the expense of repairing or replacing your personal belongings. This also covers anything kept off-site, so your things are protected no matter where they are.
In the event of a fire, hurricane, or any other insured calamity, your furniture, clothing, sports equipment, and other personal belongings are protected. It’s possible that your personal property insurance will not cover jewels or furs, and you’ll need to purchase additional insurance, but this will depend on your provider.
Maintaining detailed records of your personal property is essential to maximizing the value of your home insurance policy. Many people are incapable of recalling all their belongings whenever a partial or total loss happens. As a result, insurance policyholders must keep a record of the items they could claim if they were destroyed or lost in a hazard. Your record should include pictures or videos of your belongings. If you have any receipts or other proof of purchase, you should add them.
Additional Living Expenses (ALE)
If an insured disaster damages your home and you are forced to evacuate, your homeowner’s insurance will cover the additional costs of living elsewhere. While your house is being restored, it pays for lodging, meals, and other living expenses.
Comprehensive Personal Liability
If somebody is injured or their property is damaged in your home, this insurance will cover the costs of medical care and repairs. In the event of a lawsuit, liability insurance may also cover the cost of legal services. It will cover court expenses and any awards you are directed to pay, up to the policy’s limits.
As the name implies, medical payments coverage covers the medical expenses of people who are injured on your property by accident, but not anyone in your household. It makes no difference who is to blame for the situation. Minor injuries that happen within your premises and surrounding areas such as alleyways and sidewalks are covered under this policy. It also covers injuries that occur outside of your house, like when your dog bites someone in a park.
What Isn’t Covered by Homeowners Insurance?
There are several things that homeowner’s insurance does not cover, such as damage from earthquakes and floods. Other things homeowners insurance will not cover are:
- Neglect or failure to make repairs
- Wear and tear
- Corrosion and rust
- Animals and pests
- Nuclear hazards
- Power failure
- Government actions
Nowadays, having homeowners’ insurance is a necessity. In the event of a natural disaster or another catastrophe, knowing the specifics of your homeowner’s insurance coverage could be the difference between losing everything or being able to restore your home and replace your personal belongings.
If you want to learn more about owning a home, take a look at our courses at Wealtheo™ today. You can also check out our mortgage calculator.