What Is Home Owners Insurance
As the name suggests, home-owners insurance, or simply home insurance is all about home protection. Most people cannot manage to reconstruct and restore their home completely after a disaster.
This is where homeowner’s insurance policy comes in. Home-owners insurance is a type of property-insurance that gives financial-protection in case of an accident or disaster in your home. It’s comprised of various coverages’ that can give monetary support to rebuild or restore your home together with all your personal possessions damaged through any kind of accident including theft and fire.
What the Policy Provides
A home-insurance is everyone’s necessity – not a luxury. With this type of policy, individuals and business institutions will not have to worry about the security of their buildings since everything necessary is already covered in the policy. In addition, you don’t need to have your own house in order to be insured since land-lords need to have renters-insurance’ for all their tenants. But in any way, this type of protection is wonderful for every person.
The insurer of a standard home insurance policy will have to cover costs that are related to the following.
• Damage to exterior or interior of the house
Your insurance company will have to compensate you in case your home is damaged by vandalism, fire, lightning, hurricanes and other kinds of disasters covered in the policy. This compensation will be used to either restore or reconstruct your home completely.
Natural calamities like earthquakes and floods and poor-handling and maintenance of your home are not covered. However, if you require protection against effects of such type, you may consider getting a separate rider.
• Damage or Loss to personal possessions
The policy will cover all your belongings including furniture, appliances, clothing and many other home articles if they get destroyed in a disaster. Personal belongings such as jewelry are also covered in the “off-premises-coverage” and you can claim for compensation if they’re lost or stolen – it will not matter where the items were lost.
• Personal liability for damage or injuries caused by your family or you
Personal-Liability-coverage protects you against legal proceedings filed by other people. For instance, when your pet bites your friend or neighbor, your insurance company must pay the medical expenses to the victims no matter where the bite has occurred.
Any injuries or damages caused to other people on your property are included in this coverage.
Various types of Coverage
Essentially, there are 3 levels-of-coverage in a home insurance policy. They include the following:
• Actual-cash value – Covers the total value of your house and personal belongings after taking away the value of depreciation.
• Guaranteed (Extended) replacement value/cost – This value pays for the amount of money it costs to restore or completely reconstruct your home.
• Replacement cost/value – This is actual cash value without taking away the value of depreciation. With this, you can comfortably recover or reconstruct your home up-to-the real value (original cost)
What isn’t covered in homeowner’s insurance policy?
While it covers various kinds of losses, some occurrences such as natural disasters are not included in the policy. The so-called acts of God, are excluded. To include this coverage in your policy, you need an extra policy such as flood or earthquake insurance.