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Homeowner's Insurance 101

What Homeowners Insurance Covers

Considering that your home is likely one of your most significant investments, protecting it from catastrophic damage and losses that a disaster or an accident may bring is of paramount importance.

By buying homeowners insurance, you will get the best possible protection for your home.

A typical home insurance policy covers property damage. It also covers the personal liability of homeowners and members of their family for personal injury or property damage to others that happen within their property. Let’s take a closer look at what your home insurance coverage will take care of when disaster strikes.

The Physical Structure of Your Home

Depending on the type and extent of your homeowner’s insurance, any visible or non-visible damage to the physical structure of your home is covered. Be it the roof, walls, or the foundation itself, your home insurance provider will take care of the repair, or if need be, replacement of those parts of your home.

Other structures within your property, including the detached garage, fence, tool shed, or gazebo, are also covered by home insurance.

Personal Belongings

Home insurance ensures protection for your appliances, furniture, clothing, jewelry, sports equipment, silverware, and other belongings in case of damage or loss, although the extent of the coverage is still subject to the limitations of the policy.

Personal Liability

As a homeowner, you may be held legally liable for any personal injury or property damage to others that may or may not have occurred within your property.

With homeowners insurance, you won’t have to pay out of pocket for instances where a visitor slips on your stairs or when your child throws a baseball through a neighbor’s window and breaks an expensive vase.

A home insurance policy provides no-fault medical coverage for visitors who hurt themselves within your property. All they have to do is submit their medical bills to your insurance provider, and all their medical expenses will be covered, subject to the limitation of your policy. With this feature, the injured party won’t have to make a liability claim against you.

In the event the injured or aggrieved party files a claim or a lawsuit, the personal liability component of your home insurance policy will kick in during such cases. Depending on its limits, the policy will pay for the court costs and any awards a court may give in case it rules against you.

Additional Living Expenses

So a disaster covered by your home insurance policy strikes and renders your house unsuitable to live in for some time. You will need to stay elsewhere, like a hotel, which means there will be additional living expenses.

If you have home insurance coverage, know that it will pay for your additional living expenses or ALE. Meals, hotel bills, clothing, and other related expenses will be taken care of by your insurer. The scope and details may vary from provider to provider, though, so check with your insurer first.

Home Insurance Limitations

A basic home insurance policy covers losses and damages caused by fire, lightning, explosions, hail, vandalism, and theft. If you get broader coverage, you should be able to include damage and losses caused by falling objects, ice, snow, or even problems caused by waters, electrical, heating, and plumbing systems.

However, a homeowner's insurance policy can never be broad enough to cover damage or losses caused by earthquakes and natural flooding. You will need to get separate policies for that.

Home insurance may not be a requirement for every homeowner the way car owners are required to get car insurance. Still, you should not let the absence of a government mandate get in the way of getting a financial safety net if something untoward happens to your home. Insure your home now and protect what is possibly your most valuable financial asset.


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