What is homeowners insurance?
Homeowners insurance is about protection. Many people cannot afford to rebuild their homes and replace everything in them in the event that there is a catastrophe. This is why homeowners insurance is so important. Here’s what homeowners insurance is all about:
What is homeowners insurance?
A homeowners policy will protect your home and belongings from any damage that may occur to it. Homeowners coverage can cover your property and some of your personal items. It is a combination policy that covers two types of coverage.
Protection against damage to your property from certain perils like fire, theft or windstorm
- Liability coverage – such as if someone is injured on your property
In the event of an unplanned event such as a fire or burglary for example, homeowners insurance will pay for damages and losses. Home insurance policies may offer liability coverage for certain types of accidents, such as property damage or bodily injuries sustained by guests.
Home insurance policies can offer a range of coverages. Knowing which types are available for what damage is important. Let’s look at the details.
What coverage does homeowners insurance provide?
Knowing the basics of homeowners insurance is important. It’s also important to understand the coverage of a standard policy. Homeowners Insurance will cover damage due to perils like
There are many additional coverage options for floods or earthquakes, which are typically not covered by standard policies.
What kinds of coverage does common insurance provide?
Most homeowners policies provide the following coverages:
Insurance coverage for dwellings
The structure, built-in appliances, and wall-to–wall carpet of your home are all covered by dwelling coverage. According to your home insurance policy, “dwelling”, refers both to your entire home and any connected structures (e.g. attached garage or cellar). If your home is destroyed by a covered loss this policy will pay for repairs and rebuilding.
Coverage of other structures
Your property may have other structures, which are not attached to your residence. Insurance may cover damage to unattached structures such as sheds, garages, and guest houses.
Personal property coverage
Personal property coverage covers personal property in your home, such furniture or electronic items, that are damaged or destroyed due to a covered loss.
Liability coverage could cover the cost of bodily injuries suffered by guests while they are on your property, as well as other covered expenses, if you are negligent. This can include medical bills, income loss and pain and suffering. You could also get legal defense costs in case of a dispute.
Loss of Use Coverage
If you have to temporarily leave your home because of a covered loss loss, loss-of-use insurance will pay for additional living and housing costs. If your home has been damaged or rebuilt due to a covered incident, loss of use would pay for temporary housing or rent.
Is homeowner’s insurance mandatory?
Yes, and no. State law does not require homeowners insurance, but auto insurance does. Your lender may require you to obtain a policy with a certain amount of home insurance coverage. You can protect your home, belongings and assets from the unknown. This will help you avoid costly damage.