All you need to know about homeowners insurance.
If you’ve just moved into your new home or are hoping to make the move into a home that you can call your own, it’s essential for homeowners to understand the nuts and bolts of their homeowners insurance. It is, after all, designed to protect you, your family, and home from suffering loss or damage.
Almost all mortgage lenders require insurance coverage to protect their investment and it’s smart to have this kind of protection! Before you buy the bare bones of homeowners insurance that can leave your home exposed to financial strain, read on to understand the basics of homeowners insurance.
A standard homeowners insurance policy should include these four types of coverage:
- Damage to the interior or exterior of your house: This part of a policy pays to repair or rebuild a home if it’s damaged or destroyed by fire, hurricane, hail, lightning, or other listed peril in the policy. It won’t pay for damage caused by a flood, earthquake – but these two policies can be purchased separately.
- Loss or damage to your personal belongings: Everything from furniture to clothes to sports equipment and other personal items are covered if they’re stolen or destroyed by a disaster. Trees, plants, and shrubs are also covered under standard homeowners insurance should they face fire, lightning, explosion, and vandalism. Personal items of high value are often excluded from this coverage (such as jewelry, furs, silverware), and will need a rider to protect their entire worth.
- Personal liability for damage or injuries caused by you or your family: Liability covers against lawsuits for bodily injury or property damage that policyholders or family members cause to other people. It can pay for the cost of defending the policyholder in court, up to the policy limit. An umbrella insurance policy provides broader coverage, including claims for libel and slander, as well as higher liability limits.
- Additional living expenses: This pays the additional costs of living away from home while it is being repaired. The cause could have been due to a fire, storm, or listed disaster in your policy. In this case, your insurance can foot the bill of hotel rooms, restaurant meals, and other living expenses associated while the home is uninhabitable.