What is Homeowners Insurance?
Your home should be a safe and private place. Unfortunately, that is not always the case, threats like severe weather, fire and theft are risks to us all. It is the goal of homeowners insurance to help you recover after a loss; to feel secure and whole again. Your home is also an investment, and like any investment, you need to care for it and protect it from all types of loss risks.
Homeowners insurance is comprised of four types of coverages, and can be customized to include more specific coverages applying to your home.
Dwelling coverage generally covers the physical structure of your home, paying for rebuilding or repair if damaged is caused by a covered peril. All homeowners policies will differ, considering geographic region and state regulations, but will generally offer coverage for the following events:
- Lightning strikes.
- Damage caused by the weight of snow, sleet or ice.
- Falling objects.
- Damage from an aircraft.
- Damage from a motor vehicle.
A dwelling is defined as the structure in which you live, as well as other structures that are attached to it, such as a garage or deck. Some exclusions to dwelling coverage include coverage for flood, earthquake and sewer back-ups (damaged caused from poor or no maintenance). Other structure coverage will cover unattached structures, such as tool sheds and detached garages.
Personal property coverage is included to insure all your belongings inside your dwelling and other structures. There are two types of personal property coverage: those that reimburse you for the replacement cost for an item, and those that pay for its actual cash value. A replacement cost policy typically pays the dollar amount it will take to buy a new item at the time of a claim. An actual cash value policy provides coverage based on the current value of an item. It’s also important to know that personal property coverage usually has certain limits on what it will pay to replace an item or category of items.
Liability coverage is the fourth included coverage in most homeowners policies. It protects homeowners when liable for third-party bodily injury or property damage. It generally will pay for legal expenses, injured party’s medical bills and lost wages as well as costs of repairing accidental damage to a third-party’s property.
In addition to the above coverages, many carriers also offer optional and extended coverages to further cover your home and property.