Homeowners Insurance – What It Entails
A homeowner insurance is a kind of property insurance that covers damages and losses to the person’s home and assets in the house. The insurance provides liability cover against any accidents on or in the property. The insurance gives you financial protection in case of a disaster.
The coverage includes:
• Coverage for home structure
• Coverage for personal belonging
• Coverage for additional living expenses
• Coverage for liability
The insurance policies cater for the homeowner depending on their unique needs. The benefit of having one is that saves you money in the long run in the event of a disaster. The insurance enables you to live stress-free because it prepares you for the unexpected.
Coverage for Home Structure
The insurance policy pays for the repairs of the home and costs for rebuilding the home after a disaster like fire, lightning, hurricanes or other disasters in your policy. Most policies cover detached structures like the tool shed, garage or gazebo for 10% of the insurance amount on the home structure.
A standard homeowner policy does not pay for damage due to floods, routine tear and wear or earthquake. Buy enough coverage to cater for all costs of rebuilding the home.
Coverage on Personal Belongings
The coverage covers sports equipment, furniture, clothes and other personal items in the policy cover. The coverage is 50-70 percent of the total amount covering the home structure.
Conduct a home inventory to enable you to know precisely the amount of coverage to purchase.
Personal belongings coverage includes items off the premises. Expensive items like art, jewellery, silverware, furs, collectable can be included in the coverage.
Purchase a special personal property floater or endorsement if you want to ensure the items for their full value. You can include shrubs, trees or plants under the standard insurance package for about $500 per item. Plants and trees are covered for diseases if they are not well maintained.
Liability coverage takes care of lawsuits for property damage or bodily injury that you or your family members cause to other people. The cover pays for any damage that your pet cause. Therefore, if your son or daughter accidentally ruins your neighbor’s expensive flower vase or rug, you are well covered. However, if your family destroys your rug, there is no cover.
The liability part of the insurance policy pays for the award from a court process and the cost of defending you in a court of law. The coverage is up to the limit in your insurance policy documents.
Liability limits start at about $100,000, but you can discuss with the insurance professional whether to purchase a higher protection. If you have significant assets and want extra coverage than the limit under the policy, you can purchase an umbrella liability policy which offers you broad coverage with higher liability limits for more expensive neighborhoods.
Besides, the policy provides no-fault medical coverage. Therefore, if a neighbor or friend is hurt, they can just submit their medical bills to your insurance company. It is a way of paying the expenses without a liability claim being filed in the court against you. However, it does not pay your family medical bills or that of your pets.
Additional Living Expenses
The coverage pays for the extra cost of living far from home after a disaster like a hurricane, fire or any other in the policy. The coverage takes care of restaurant meals, hotel bills and other costs above and over your normal living expenses as the home is being rebuilt.
The additional living expenses coverage has limits, and some policies have a time limit. However, the limits are separate from the home repair or rebuilding costs. In the event you use up your additional living expenses, the insurance company will still cater for the cost of repairs or to rebuild the home up to the policy limit.
In case you rented out part of your home, the insurance cover the rent that you will have got from the tenant if the home was still intact.
Benefits of Having Homeowner Insurance
Protection from natural disasters
Natural disasters are frequent and bring a lot of stress and pressure on families. Rebuilding the home from scratch after a disaster is costly and can leave you broke. Every homeowner should consider getting the insurance as it helps you prepare for any damages. The insurance protects your home from common disasters like fires, floods, hurricanes and tornadoes. The insurance caters for all repair and rebuilding costs as per the policy documents.
Protect the home from theft
Burglary incidents are common, and you can lose your valuable and expensive items. The homeowner insurance helps unsettle things as it covers the theft of possessions and cost of damages to the home.
Protection against lawsuits
Anyone can get hurt on your property. People can sue you for injuries on your property and cripple you financially as lawsuits are costly whether they get a claim award or you settle out of court. The insurance enables you to prepare in advance for this kind of situation. The insurance coverage protects you and your property against lawsuits and pays for attorney fees and medical bills. This saves you money and stress.
In certain instances when applying for a mortgage, the lending bank needs to see your homeowners insurance. It is a must if you plan on taking a mortgage loan. The insurance is the lender’s collateral.
If your lender buys the insurance on your home because you do not have one, the insurance does not cover you but covers the lender. Moreover, you pay more in monthly premiums than you would if you have the insurance.
Insurance for Condominiums
Condos has a slightly different type of homeowners insurance. The type of homeowners insurance needed for condos is called an HO6 policy. A condo, homeowners policy generally covers from the sheetrock of your unit and the interior. As in other types of homeowners coverage, you can choose different levels of insurance for your contents.
Why Is Condo Insurance Different?
When you own a condo, you have shared ownership of much of the condo complex. The condo documents should provide some insight on how much insurance is on the building (or buildings) and the common areas and common amenities such as pools. Those parts of the complex are covered with the funds paid by your condo fees.
Every insurance coverage has a limit. The maximum amount pays towards the loss. You can adjust the limits to meet your needs while taking into account the value of your belongings and home. Also, consider the cost of replacing the items or repairing the home after damage.
Who Do You Choose?
When choosing a homeowners insurance provider, it important to remember that when you make an insurance claim, you will be dealing with your agent. Your local insurance agent will be the person who sets up all of the details about your policy and their contract dictates what will and wont be covered. There is major differences between insurance agents, there level of education within the insurance field.
To find out who is locally providing competitive homeowners insurance rates – start by asking your friends and family if they are happy with their insurance agent. If you are in the process of buying a home and searching homes for sale, you will want to ask your buyers agent if they recommend anyone.
A homeowner should certainly have a homeowner insurance.