Many people don't think about home insurance until they need it. But when faced with a disaster, you'll be glad to have gotten the right coverage for your home. It's essential to understand what type of coverages are best for your needs and what they cover. If something does happen, you won't have any surprises waiting for you when it comes time to file those claims.
What Is Home Insurance?
Homeowners, renters, condominium owners, tenants, and even boat owners rely on their insurance policies. It helps them recover from disasters such as fires and floods. The policy will cover the cost of repairing your damaged property or rebuilding it if it's a total loss.
The policy also protects you if someone is injured on your property. You can use your home insurance to cover temporary housing expenses and medical bills, like if you or one of your family members is injured in a fire or another disaster.
Homeowner insurance policies also cover the cost of repairing your home after a major disaster. Such events include a fire, hurricane, or earthquake. Without home insurance, you would be responsible for the entire cost of replacement or restoration. You may also have to pay for temporary housing if your home is unlivable after a disaster.
Types of Home Insurance Coverages Available
A basic homeowners' insurance policy typically includes coverage as follows:
Liability Coverage
This pays if you're held liable for bodily injury or property damage caused by an accident happening on your property. You can also purchase liability coverage on a separate policy. It protects you from this type of lawsuit if you don't own a home or have an existing home insurance policy.
Personal Property and Loss Assessment
This covers the cost of replacing or repairing your belongings. It includes furniture and appliances up to certain limits in the event of a covered loss. This home insurance coverage can also include the cost to assign a monetary value to something irreplaceable. Such items include photographs or heirlooms that have sentimental value.
Personal Liability Coverage
This insurance pays for your legal defense and damage awards if you're held responsible for bodily injury or property damage resulting from an accident at your house.
Replacement Cost Coverage: Covers the cost of rebuilding your property after a significant loss such as fire or windstorm. However, the home insurance cover is limited to whether you're able to rebuild identical to what was originally damaged or destroyed.
Living Expenses
This covers the cost of temporary housing and other living expenses if your residence becomes unlivable for an extended period because of a covered loss such as fire, windstorm, or flood. This home insurance coverage is typically limited to a specific dollar amount per day. It will only reimburse you up to a certain maximum amount.
Share8 July 2021
I still remember the first time I had to chose an insurance policy; I was 17 years old and had just saved up enough money to afford my very first car. I was so excited to begin driving, but overwhelmed with all of the different auto insurance options. My father helped me chose a full-coverage policy that would cover the cost of my car if it were to become damaged in an accident. When I inevitably caused a small fender-bender as a new driver, my insurance company paid for my car repairs, so it sure was the best policy for me! Now that I am older and have learned a lot about home insurance and other types of insurance, I thought I would make a blog to help others who need insurance advice, like what my dad gave me. I hope I can help you make wise insurance decisions!