What’s Really Covered by Homeowners Insurance

Attention fellow homeowners! You assume that homeowners insurance only covers your home and its contents in case of a theft, disaster and other type of damage. But do you really know what is exactly covered in a basic home insurance policy? Homeowners insurance actually helps you from several unpredictable factors. For example, if falling debris or airplane lands in your home, it is also covered under basic homeowners. This article will let you know what this policy includes and what not.

Types of Home Insurances

Homeowners insurance usually includes two types of insurances:

1) Property coverage
2) Liability coverage

The former covers home, loss of personal possessions that may disappear away from home while the later covers accidents that can happen to other people at home. For example if you have invited guests for a holiday party and one of them slips on the icy front steps, then you can be held liable for this incident. But you can prevent damage and injury to others by purchasing home insurance with appropriate liability coverage.

Moreover, homeowners insurance also includes situations that are usually never considered. Like, while riding a bicycle if it is sideswiped by car then our homeowners insurance can replace the cost of the bicycle. Similarly, if you cause any damage to other’s property,  for example if a tree in your backyard falls into the neighbor’s then also the homeowners insurance protect you from their claims. Furthermore, it even covers injury caused by your pets.

Homeowners insurance companies offer different levels of coverage. The basic HO-1 and 2 list only the specific perils which don’t include earthquakes, war, floods or even termites. Further, the comprehensive form HO-3 includes all the risks. So the first and foremost thing which you should consider is what coverage do you have and what all perils are covered? And if at all those are not covered, then how can you make sure you have adequate coverage?

The general thought is that homeowners insurance must cover what it would take to replace our house and its contents and if you don’t figure out properly what all is worth then we may be under insured.

How to choose the right coverage for home insurance?

First, of course it is necessary to know the current value of your home and whether the dwelling piece of your coverage enough to replace it. Moreover, if you have other structures which are also covered then it is required to determine the value of those as well.

As the Personal Property coverage may range from 50%-70% of the dwelling amount so you are required to calculate the things properly. For this, it is necessary to make a list of each room’s contents and keep receipts for the big ticket items. Once it’s done, then you are required to add up the values and check it against the formula in homeowners policy. If you are unable to replace everything of value then it is good to add Riders to your policy.

Now-a-days most of the policies are offering computer rider that covers each of your aspects with low cost. Few other riders can also be added that provide coverage for landslides or ground collapses, theft, recreational vehicle which are parked at home and even for sewer and drains backup.

So that’s the building blocks of homeowners insurance. One thing which should always be remembered is to do a complete review of the policy once a year. In case of any query you should always contact the home insurance company or agent and become sure that you are covered for everything and whether those are sufficient or not.






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