What Does Homeowner’s Insurance Cover?
If you’ve recently become a homeowner, congratulations! One of the first things you’re likely to do is look into reliable insurance. As the name suggests, homeowner’s insurance is pretty easy to understand, but if you’re not sure what it covers, you’re not alone.
First time homeowners, and even those who have owned homes in the past, can benefit from a quick review.
What Is Homeowner’s Insurance?
People purchase home insurance to protect them in the event of damage or loss to their home caused by specific perils, such as fire, theft or certain natural disaster. A wide range of coverage is available to help pay to repair or replace the home and personal belongings.
Coverage is also available to cover your expenses if you accidentally damage someone else’s property. Or, to pay medical bills in the event someone is injured on your property.
Basic Coverage
While your insurance is available to cover a variety of things, the typical policy provides coverage for some combination of the following four key protections:
- Dwelling
- Personal property
- Other structures
- Liability
Dwelling Protection
Your physical home is considered the “dwelling” to be insured. Dwelling protection covers the structure of your home, and anything attached, such as a garage or deck. If your home is damaged by fire and smoke for example, dwelling coverage will help pay to repair or rebuild.
Other Structures Protection
Structures that are attached to the home, like a deck or garage are covered under dwelling protection. Other structures that are on your property, but not attached, like a boathouse or tool shed, are considered other structures.
Personal Property Protection
In addition to covering your actual home, your policy may cover your personal property inside the home. For example, if your home is burglarized and you lose an expensive television, or if fire and smoke damage your sofa, your policy may help to replace or repair those items covered by personal property protection. Extravagant items, like expensive jewelry, furs or collector’s sets may require extended coverage above and beyond what your basic policy outlines.
Liability Protection
The typical policy offers liability protection for you, the homeowner, in the event someone gets injured on your property. Medical expenses and legal fees related to bodily injury can be costly, and liability protection helps reduce your out-of-pocket expenses should someone get hurt.
Maximum Coverage Amounts and Deductibles
In general, the standard policy provides coverage for damage caused by theft, fire and lightening, windstorms and hail. Note that the typical policy does not cover damage from all natural disaster. Flood and earthquake damage is not considered standard, and may require a separate policy.
All coverage in your policy is subject to limits. That means there are specific maximum dollar amounts that your policy will pay for covered losses. Maximum amounts can be adjusted based on your specific needs.
All homeowner’s insurance carries a deductible—the amount you need to pay before your insurance policy pays. Choosing the right amount of coverage and deductible is the key to choosing a policy that works for you. In general, a lower deductible means a higher premium amount. Raising your deductible may significantly lower your monthly premium.
Choosing the best policy to fit your needs isn’t always easy. When you’re ready to explore, we can help.
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