Don’t you think there is no other place as your home to give you peace of mind? It’s the place where we spend quality time with our family. We think precious places like home need insurance too. When you think of homeowners’ insurance just think about the protection it offers. Most of the people around you are not capable of rebuilding their homes in case of disaster. That’s why homeowners’ insurance is so important to each one of us. So, let’s see what is homeowners’ insurance and what does it covers.
What is the Homeowners’ Insurance
Homeowners’ insurance is a type of property insurance that provides coverage related to the home. It will cover the loss and damage to your residence and other assets of your home. With homeowners’ insurance, you even get liability coverage against accidental events in the home.
The insurance policy covers four kinds of events on the insured home. They are exterior damage, damage to personal assets, interior damage, and injury to people on the property. If you file a claim then you have to pay the deductible to get benefits out of homeowners’ insurance.
For example, you claim for interior fire damage that has occurred in your home. The amount that you need to replace the area and bring it back to normal is $11000. Once the insurance company approves your claim you need to pay the deductible, say $5000. It depends on the insurance policy agreement that you sign while buying the policy. So once you pay $5000 the company will release $6000. Remember, a higher deductible means lower premiums for a homeowner’s insurance policy.
Is Their A Liability Limit?
Yes, homeowners’ insurance policy comes with a liability limit. You cannot expect the company to pay you unlimited money. The liability limit is an amount set and you won’t receive coverage exceeding that limit. In most cases, the liability limit is set at $100,000. If you file a claim then liability limit is used to determine the use of coverage.
Are home warranty and homeowners’ insurance the same?
No, they are two different types of policies. We know it sounds similar but that doesn’t mean they are the same. A home warranty doesn’t work for the entire home. It is a contract that provides coverage for repair or replacement of home appliances or systems. For example, water heaters, washers/dryers, ovens, and pools. A home warranty provides benefits for a certain period of time like 12 months. You don’t even need to buy it in order to qualify for a mortgage. Due to poor maintenance or technical issues, home appliances need repair.
Mortgages and Homeowners’ Insurance
If you plan to apply for a mortgage then you have to show proof of homeowners’ insurance. The financial institutions will grant you a loan only after receiving the proof. You can buy homeowners’ insurance from a separate firm or by the lending bank. Homeowners’ who plan to get an insurance policy must compare and pick a plan. If you haven’t bought insurance yet then the bank will obtain it an extra cost for you.
What Does Homeowners’ Insurance Cover?
With homeowners’ insurance, you get coverage for a lot of things. Here, we are going to brief you about the coverage.
#1: Dwelling Coverage
With dwelling coverage, you get protection for built-in appliances along with wall-to-wall carpet. It basically protects the structure of your house. If we explain it in terms of your policy then your house along with its connected structures come in it. For example, the garage or cellar that is built in connection with your house.
#2: Personal Property Coverage
A house becomes home once you add your personal things to it. It could be a new set of sofa to almirah. Also, everything is an integral part of your home.
The damage to one thing spoils the whole look of your home. That’s why homeowners’ insurance provides personal property coverage too. The damage to these things in accordance with the policy results in coverage.
#3: Other Structures Coverage
If your homeowner’s insurance has other structures coverage then it increases the benefits. This coverage is for the structures on your property that do not come under the dwelling. It means they have not attached structures. It could be a guest house, shed, or anything else. With other structures of insurance, you can cover all of them.
#4: Liability Coverage
With liability coverage, you get coverage associated with injuries. It will cover the treatment of people who suffer from bodily injuries on your property. Also, the coverage extends to the expenses that arise as a result of negligence. It will include the hospital bill, loss of income, and more. In case of dispute, the homeowner’s insurance will cover legal defense costs too.
#5: Loss Of Use Coverage
If the damage to your property is high, you may even have to shift to a new place. With the loss of use coverage, it won’t be a burden for you. The insurance company will pay for additional housing and living expenses. You can shift to a hotel or a temporary apartment without financial pressure.
A homeowner’s insurance policy is a blessing for all those who don’t want to spend on the unwanted events. In fact, once you shift to your own house you will realize that there are issues that may arise. People don’t plan problems but they can enter your life anytime. Thus, you should get a policy for yourself and some good companies providing nice homeowners’ insurance policies are Allstate, Geico, etc. From interior to exterior the coverage is vast for homeowners’. You have to check your insurance policy terms and conditions to know the exclusions. Yes, the policies do exclude a few events. You may even get limited coverage on a few things. People neglect the crucial points in their policy. You can even consult an expert to understand what’s best for your insurance policy.
We hope you got to know what is homeowners’ insurance and what’s in there for you in this policy. In case, you want to know more about it then contact us. Just leave your comments and we will get back to you with answers in minimal time.