Homeowner insurance coverage is a policy that protects your home from damage caused by natural and man-made disasters. It also covers any liability costs if you are sued by someone who is injured on your property or home.
What's covered by the policy?
Many home insurance policies include coverage for the structure of your home and your personal belongings. But some homeowners require extra protection to cover specific perils. Some homeowners may choose to purchase separate policies if they live in an earthquake or flood-prone area.
Coverage for HO-1: Residential Structures
The basic form of home insurance includes coverage for both the house itself and the other structures, like the garage or shed. It will typically pay for the replacement cost of your home and its belongings, up to the limits set by your insurer. The policy also covers other perils such as vandalism, theft, fire, smoke and wind.
Additional Contents and Liability Coverage (HO-2)
This policy type is more comprehensive than the HO-1 and provides coverage for other items such as jewelry or fine arts, electronics, or electronic equipment that may be lost due to an incident covered by your homeowners policy. Several policies include coverage for liability in the event of slip and falls, dog bites, or other incidents.
Home Replacement Cost Coverage
Most homeowners should choose this option because they can rebuild their home and contents for a percentage of what the items are worth. The cost is higher than the cash-value option, but the policy can help restore your house to its previous condition.
The Right Deductible
The higher the deductible you choose, the cheaper your premiums. This is a great option if you are a homeowner with a lot expensive or valuable belongings. These items can't be easily replaced, and they would suffer a significant depreciation rate in the case of a loss.
The Right Coverage Levels
Most companies offer the option to upgrade this coverage for an additional fee. Replacement cost coverage is preferred by most homeowners because they are more likely to receive the full replacement value of their items, less depreciation. This can be a significant amount less than cash-value coverage.
Choosing a Good Insurance Company
Many consumers have a negative experience with insurance companies, despite the fact that they claim to offer excellent customer service. Asking questions about an insurer's consumer satisfaction and retention rates is the best way to find out if they are a good match for you.
Does Home Insurance Cover Damages To Other People's Propertys?
Some homeowner policies include coverage for damage caused to another person's property. This can cover the cost of temporary housing or living expenses while you repair your home or renovate it. This can be a big benefit for families who lose their homes in disasters, such as fires or hurricanes.