A policy for homeowner insurance protects the home against damage from both natural and manmade disasters. It also covers any liability costs if you are sued by someone who is injured on your property or home.
What Is covered?
Some homeowners need extra protection against specific perils. For example, those living in areas prone to floods or earthquakes might choose separate policies for those events.
HO-1: Coverage of Dwellings and Other Structures
This is a basic home insurance policy that covers both the home and other structures such as a garage or shed. The policy will usually pay to replace both the house and its contents up to a specified limit. This depends on the insurer. This insurance covers many other perils including fire, smoke, wind, ice, hail, lighting, vandalism, and theft.
A coverage for Other Contents & Personal Liability
This type of insurance is more comprehensive that HO-1. It covers a wider variety of items, including jewelry, fine art, and electronics, which may be damaged or lost as a result of an accident covered by a standard homeowners' policy. Some policies offer coverage for your personal liability. This can include things like dog bites and slip and fall accidents.
Replace Cost of Dwelling Insurance
This is the option most homeowners choose, because it will pay to rebuild the home and its content up to a specific percentage of their actual cash value. The policy is typically more expensive but will pay to restore the home to its pre-loss condition.
Selecting the Right Deductible
Your annual premiums are lower the higher your deductible. This is especially beneficial if your home contains many expensive or valuable possessions that would not be easily replaced in the event of an insurance claim.
Choose the right level of coverage
The standard homeowners insurance policy includes both the actual cash value and the replacement cost coverage. However, most companies will allow you to upgrade either of these options at an additional charge. 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
While every company claims to have excellent customer service, many consumers are disappointed with their experience with the insurance companies they work with. To determine if a company is right for you, ask about its retention rate and satisfaction rates.
Does Home Insurance Cover Damage to Other People's Property?
Some homeowner insurance policies provide additional coverage in the event of damage to someone else's property. These can be helpful for temporary accommodation or living costs during home repairs or renovations. This can be a big benefit for families who lose their homes in disasters, such as fires or hurricanes.