For the most part, people don’t think about insurance until they need it. However, knowing what your homeowners insurance policy covers and does not cover can mean the difference between rebuilding your home and replacing your personal effects. In addition, homeowners need to do annual insurance policy “check-ups” to keep up with local building cost increases, home renovations, and inventory updates.
What Is a Homeowners Insurance Policy?
The homeowners insurance policy will compensate you if you suffer damage to your home or personal property due to an event covered under your policy. The policy also covers you if you cause property damage or injure someone else. Even though homeowner’s insurance policies are infinitely customizable, they also have some standard provisions that outline the costs the insurer will cover:
Exterior Or Interior Damage To Your Home
Damages caused by fire, hurricanes, lightning, vandalism, or any other covered disaster will be compensated by your insurer so that your house can be repaired or even completely rebuilt. However, floods, earthquakes, and poorly maintained homes are generally not covered and may need a separate rider if you want to insure these items. Similarly, a detached garage shed or other structure on the property may need to be covered separately, using the same guidelines. Most items in your home are insured if destroyed in a disaster. It includes clothes, furniture, appliances, and other contents. There are even policies offering “off-premises” coverage, so you can file a claim for lost jewelry, for example, no matter where you lost it.
Personal Liability For Damage Or Injuries
You are protected from lawsuits filed against you if you have liability coverage. Your pets are also covered under this clause. Thus, if your dog bites Doris, whether the bite occurs at your house or hers, your insurance company will cover her medical expenses. In addition, if your kid breaks her Ming vase, you can file a claim for reimbursement. Even if Doris slips and lands on the vase pieces and successfully sues for pain and suffering or lost wages, you’re still covered for those losses, just as if it was someone who fell on your property.
Rental Of a Hotel Or House While Your Home Is Being Repaired Or Rebuilt
Hopefully, you will never be in such a situation, but it will be the best insurance you’ve ever had if it does happen. The additional living expenses portion of your coverage would pay for the rent, hotel room, dining out, and other incidental costs you incur during the waiting period for your home to become habitable again. If you plan to book a suite at an expensive hotel, please remember that the policies have strict daily and total limits. Those daily limits can be increased if you are willing to pay more for coverage.
What Does Homeowners Insurance Not Cover?
Generally, homeowner’s insurance will cover most scenarios where a loss could occur, but certain events, such as natural disasters, are not typically covered. Are you at risk of floods or hurricanes where you live? How about earthquakes? For these, you’ll need riders or a separate policy for earthquakes or flooding. Additional coverage is available for sewer backup and drains backup, and you can even add identity theft coverage for reimbursement of expenses related to identity theft.
You can’t expect your homeowner’s insurance company to give you a check for the amount of your policy if your home is destroyed. The payout is directed to contractors, depending on the cost of selected reconstruction and the insurance coverage. A crucial decision is choosing coverage that will cover the total cost of rebuilding your home, even if costs exceed your policy limits.