Purchasing a new home can be one of the most exciting times of your life. It can also cause a tremendous amount of stress. There certainly is a plethora of things to deal with. There is also a ton of paperwork to sign that is full of terms that you may or may not fully comprehend. That being stated, it is important that you are fully aware of what you are going to be responsible for before signing the dotted line. Understanding your homeowners insurance policy can go a long way in this department.
Homeowners coverage provides financial protection against a loss or losses due to accidents, disasters, and even theft. Most standard homeowners insurance policies include four types of coverage as follows….
Homeowners Insurance Covers The Structure Of Your Home
Your homeowners insurance plan covers the repair or rebuild costs if your house is damaged or even destroyed by disasters as listed in your policy such as fire, hurricane, hail, or lightening. Most homeowners insurance policies cover the main structure as well as detached structures such as the garage, gazebo, or tool shed. Standard insurance coverage does not pay for damages that are caused by a flood or earthquake, although separate policies can be purchased to cover these emergencies.
In addition, your homeowners insurance policy does not cover normal, or routine, wear and tear. It is incredibly important to purchase a policy that provides enough coverage to rebuilt your home.
Homeowners Insurance Covers Your Personal Belongings
Your homeowners insurance plan covers the replacement value of your furniture, clothing, equipment, and other personal items if they are stolen or destroyed in a fire, hurricane or other insured disaster. The personal belongings coverage also includes items that are stored off of the premises. Most plans include up to $500 of coverage for unauthorized use of credit and debit cards. Expensive personal items such as jewelry, high-value collectables, and high-priced artwork are covered.
However, there are typically dollar limits if these items are stolen. In order to insure these expensive items to their full value, a separate personal property endorsement or floater can be purchased by the homeowner. Trees, shrubs, and plants are typically covered for upwards of $500 per item, but are not covered for disease or poor maintenance.
Homeowners Insurance Covers Your Liability
Your homeowners insurance plan covers you against lawsuits for property damage or bodily injury that either you, or your family members caused to other people. It also pays for damages to other people that are caused by your pets. For example, if a visitor to your home trips over one of your children’s toys, or your pet’s toys, you are coverage for the damages it causes. The liability coverage also pays for the costs of defending your case in a court of law, and any damages that the court awards to the other party or parties up to a specific amount of money that is stated in your policy.
Liability limits typically begin at $100,000. That being stated, it makes sense to discuss whether or not you should purchase a higher level of protection with a professional insurance agent. If you have a considerable amount of assets that require additional coverage, you may choose to purchase an umbrella policy that will provide you with higher limits and a wider range of coverage.
Homeowners Insurance Covers Your Additional Living Expenses
Your homeowners insurance plan covers the added costs of living away from your home if you cannot live there based on damage that is caused by an insured disaster. In essence, the addition living expenses include hotel/motel bills, restaurant meals, and other costs that are above and beyond your typically living expenses. It should be noted that most homeowners insurance policies have limits, and many include a time frame limitation.
For example, if construction is underway and it is projected to take three months to complete, the additional living expenses may not cover anything beyond three months even if the work is incomplete. If you rent out part of your home, your policy will also reimburse you for the rent that you would have collected if the property had not been destroyed.
For more information about home owners insurance please contact Zawada Insurance Agency today.