Homeowners insurance (also called home insurance) is not a luxury; It is a necessity. And not just because it protects your home and property against damage or theft. Virtually all mortgage companies require borrowers to have insurance coverage for the full or fair value of a property (usually the purchase price) and will not loan or finance a residential real estate transaction without proof of this.
You don’t even need to own your home to need insurance; Many landlords require their tenants to maintain renter’s insurance coverage. But it is wise to have this type of protection whether it is necessary or not. We’ll walk you through the basics of home owner’s insurance policies.
What is Homeowners Insurance?
Homeowners insurance typically covers damage to your dwelling, other structures on your property, personal property, personal liability, medical payments to others, and usage costs. Payment for damages depends on whether the damage was caused by a covered peril and the extent of homeowner’s insurance coverage on your policy.
Homeowners insurance pays if an event covered under your policy damages or destroys your home or contents. It will also cover you in certain cases if you injure another person or cause property damage. Homeowners insurance has four main functions:
- Pay for somewhere you can live while your home is being repaired.
- Personal liability cover if you are held legally responsible for damage or injury caused to someone else.
- Pay for the repair or replacement of your personal belongings.
- Pay for repairs, landscaping and other structures to your home.
Personal Liability For Damages Or Injuries
Personal property refers to your personal belongings – such as clothing, furniture, electronic equipment and appliances that are not built in. Most homeowner’s policies cover these items anywhere in the world, not just inside your house. So if someone steals your bike from outside a store, it may be covered.
Liability coverage protects you against lawsuits filed by others. This section even covers your pets! Therefore, if your dog bites your neighbor, it doesn’t matter if the bite occurred at your or his location, your insurer will pay for his or her medical expenses. Or, if your child breaks their Ming vase, you can file a claim for reimbursement. And if Doris slips on pieces of the broken vase and successfully sues for pain and suffering or lost wages, you’ll be covered for that too, just as if someone was hurt on your property.
These events, usually referred to as the “perils” in your policy, include the following:
fire or electricity.
- Thunderstorm and hail.
- The weight of snow, ice and sleep.
- Sudden damage from lightning surge.
- volcanic eruptions.
- falling objects.
- Overflow or discharge of water from home systems such as plumbing, air conditioning and appliances.
- aircraft damage.
- Vehicle damage.
- The cold of the same domestic systems.
- Sudden bursting, rupturing or bulging of hot water system, steam system, air conditioning or fire protection system.
Housing Coverage In Homeowners Insurance
- Helps pay for repair and/or rebuilding costs if the structure of your home is damaged.
- Can cover separate structures in your home such as garages, fences and mailboxes.
- Covers damages caused by fire, lightning, windstorm, hail, explosions, vandalism, falling objects, snow or ice, and accidental water damage.
Types of reimbursement In Homeowners Insurance
|Actual cash value||Factoring in your depreciable value includes replacements or repairs to your assets. This type of policy has the lowest down payment and the least premium.|
|Guaranteed replacement cost/value||It covers the full cost of replacing your home in the event of a total loss, even if the amount to do so exceeds the established policy limits. While more expensive, this type of policy can be extremely helpful if you live in a disaster-prone area, such as California or Florida.|
|Replacement cost||Covers the full cost of repairing or restoring your property to its original condition, up to the limits established by the policy.|
How to File a Homeowners Insurance Claim
- Contact your insurer: You can usually start the claims process online or by phone. After a widespread disaster, such as a wildfire, your insurance company may open a mobile claim center where residents can file claims. A claims adjuster will be assigned to handle your claim, provide you with a claim number, and explain how the claims process works.
- Recorded proof of loss: Capture photos or videos of damage to your home and property. If possible, don’t throw anything away until the claims adjuster tells you that you can.
- Make any necessary repairs: Your insurance company may be required to take reasonable steps to prevent additional damage to your home. For example, you may need to board up broken windows. Document the damage first, and keep receipts relating to any repair expenses.
- Get Estimates: Get bids from local licensed contractors to repair or remodel your home. Your claims adjuster can use quotes to estimate how long the process will take and how much it will cost.
- Keep detailed records: Write down the names of the people you talked to, note what they told you, and keep records and receipts for any expenses related to the loss or claim.
Homeowners Insurance Features:
|HO-3 Policy Features||What it covers||What it doesn’t cover|
|Loss of Use Coverage||-Coverage for additional living expenses that may result from damage to your residence|
-Includes food, travel and accommodation expenses
|Living expenses that arise after your home is rebuilt|
It covers only those expenses which exceed the regular living cost
mortgage payments, taxes
|Personal Property Coverage||Covers damage to your property even when you are using it away from your home|
Covers personal items in your home, up to 50 or 70% of your home’s sum insured
Coverage for perils, damage or theft
|any lost items|
Motor Vehicles and Aircraft
Damage to private property due to flood or earthquake.
Additional coverage for high value items must be purchased separately
|Dwelling Coverage||Covers the cost of repairing and/or rebuilding your home if damaged by a covered risk.||-Flood, earthquake or sinkhole|
-Damage due to negligence
|Personal Liability Coverage||-legal costs|
Pays medical expenses for people who do not live in your household
Liability protection for accidents and/or bodily injury caused to a guest
Refund of lost wages
|Injuries to people living in the house|
Injuries that were intentionally inflicted
I think you all know about Homeowners insurance. If you have any question regarding this then comment below i will always help you in this matter. So, Homeowners insurance coverage will depend on the type of policy you get, the amount of coverage you choose, and the small print on what is and is not covered.
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