What Is Covered by Homeowner’s Insurance?
Buying a home is an exciting feeling. Everyone wants to protect their homes and their valuable belongings. They purchase homeowner’s insurance so they can have a sense of safety to fall back on. Knowing what is typically covered by homeowner’s insurance and what is not will help save heartache and money in the future.
What Does Your Policy Cover?
Homeowner’s insurance provides the financial protection that homeowners need. It is a combination of coverages that can help replace or repair the home, or compensate for damaged belongings in some instances. It’s important to understand that each policy is different — you should always read the fine print and ask questions. However, a few things that are usually covered include:
• Damage or destruction of the home from fire, hurricane, and other disasters listed in the policy.
• Personal belongings, if they are stolen or destroyed by the disasters that are listed in the policy.
• The liability provision of your insurance will cover personal injury — for example, if someone else is hurt on your property. (However, not all types of injuries may be covered.)
• Additional living expenses may cover your living needs (hotel stays, restaurant bills, etc.) if your home is no longer livable due to a disaster that’s covered by the policy.
Catastrophes
As the saying goes, “life happens” and so do catastrophic events. As a result of natural disasters, homes and property can sustain damage or be completely destroyed. The standard homeowner’s insurance policy will cover many natural disasters and weather events like hail, lightning, and fire. However, damages from floods and earthquakes are often not covered. Coverage for these events may require a separate insurance policy. Make sure you understand exactly which disasters are covered by your homeowner’s insurance, so you can decide whether to buy additional coverage if needed.
Preventable Measures
Taking care of a home is a lot of hard work. Keeping up with routine housework and basic maintenance can help prevent small issues from becoming costly major repairs that you may not be able to afford. In addition, keep in mind that home insurance typically does not cover damages that are caused by neglecting basic maintenance.
One example is mold. Generally, mold takes time to grow and can be addressed before any health hazards arise by maintaining your roof, checking for cracks and leaks where moisture can get in, and keeping on top of cleaning in areas like the kitchen and bathroom, or anywhere else mold tends to grow.
A home that has been deemed non-livable and not up to standard building codes and regulations is also typically excluded by homeowner’s insurance. However, a rebuilding provision may be available as an add-on.
Belongings
When purchasing insurance for a home, there is typically a section allocated for personal belongings. Personal property is important to many. However, most policies have a limit and typically do not cover very expensive goods, like jewelry worth more than $2,000 USD. However, additional insurance can be added if you have any luxury goods worth more than that.
Other Exclusions
There are other types of loss and damage that are usually not a part of a standard homeowner’s policy. Identity theft has become more a common problem. Nonetheless, it is not covered by the typical homeowner’s insurance. Another type of claim to consider is a business-related claim. These do not qualify under typical homeowner’s insurance. If you operate a business from your home, which has become more common, the business may need to be insured separately.
In addition, one of the most common exclusions is certain types of injuries. Sometimes, dog attacks are not covered by the liability provisions included in homeowner’s insurance. Take a good look at the policy and always bring these questions to your agent for clarity on specific exclusions.
Bundles and Pricing
While there may be a variety of scenarios that aren’t covered by homeowner’s insurance, there are also some money-saving discounts that many insurance agencies offer. For example, you can often purchase different types of insurance together as a bundle and save money. Popular bundles include home and auto insurance, or home, auto, and life insurance.
There are more saving opportunities possible, and you may even qualify for special discounts based on your circumstances. Finding a policy that meets your needs and saves you money can provide both peace of mind and extra room in your budget every month.
More Insurance Tips
When in the market for a new home or for insurance to cover it, keep in mind what the typical policy covers. Make sure you get all the information about any property you’re considering buying, so you understand its particular risks.
Learning more about the property’s location and its history — for example, if it is located near a flood zone or potentially uninsured hazardous zone, or if it has seen fire damage in the past — will help you make the best decision about what insurance you need to purchase.
Consulting with a licensed insurance professional will also help you determine your needs and address any other concerns you have. A licensed insurance professional will be happy to answer all your questions and help you understand exactly what a particular policy covers.
