What is Homeowners Insurance?
The raison d’être for good homeowners insurance is to provide protection for your home and personal property from such events as fire, theft, vandalism and various covered types of weather and is often mandated by mortgage companies and lenders.
When purchasing homeowner insurance, it is wise to enquire about what is covered and what the various deductibles might be. Keep in mind that exclusions for losses not covered are often part and parcel to a policy and the additional premiums that can be paid in order to extend coverage over and above existing policy limits. Common exclusions are flood and earthquake coverage; these must be obtained separately in the form as an additional policy or as a rider or endorsement.
Different kinds of home insurance include dwelling fire, basic, modified, broad, and special forms. Dwelling Fire is a form of bare bones coverage that is generally utilized for properties that are vacant. Basic and modified are like dwelling fire but extra coverage for any theft or vandalism. Broad includes coverage for pipes that may freeze or any water leaks within the property interior.
Condominium insurance is a different policy that specifically covers only the interior and any personal content loss within the condo. Tenant insurance provides coverage for only the contents within.
“Special” is, despite its name, a traditional homeowner’s policy that includes such elements as dwelling coverage, which provides protection for the structure of your abode and any structures attached to it. This would include coverage for damages to any installed systems such as plumbing, electrical and HV/AC. Outside structures such as sheds, fencing, detached garages and the like, which lie on your property, are also covered.
What is called personal property refers to your personal belongings within your home. Examples include appliances, furniture, and even wardrobe. Note that these items remain covered whether on or off the property. (Such as when you traveling away from home.)
Loss of use coverage protects you from any additional costs should you be forced to find lodgings elsewhere if your home is under repair due to a covered event. Personal provides coverage when you are sued for injuries or damages by an individual who is somehow injured on your property. It also covers medical payments for those who have sustained the injury in your home.
There are usually two ways that the provider reimburses you for any covered losses. One is known as “replacement value,” which compensates you for the value of your property brand new. “Actual value” is where the property value is determined after normal depreciation. The best homeowners’ insurance policy will help you to get your home and personal property back to the state it was previously to the damage.