Insurance

Homeowners Insurance Basics | III

Homeowners insurance is a package policy. This means that it covers both property damage and legal liability for any injuries and property damage that the insured or their families cause to other people. this includes damage caused by household pets.

Damage from most disasters is covered, but there are exceptions. standard homeowners policies do not cover floods, earthquakes, or poor maintenance. Flood coverage is provided by the federal government’s National Flood Insurance Program, although it is purchased from an insurance agent. earthquake coverage is available as an endorsement or as a separate policy. most maintenance related issues are the responsibility of the owners.

Reading: What to look for in homeowners insurance coverage

A standard homeowners insurance policy includes four essential types of coverage. include:

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1. Home Structure Coverage This portion of the policy pays to repair or rebuild a home if it is damaged or destroyed by fire, hurricane, hail, lightning, or other disaster listed in the policy. will not pay for damage caused by floods, earthquakes, or normal wear and tear. Most standard policies also cover structures that aren’t attached to a house, like a garage, tool shed, or gazebo.2. coverage of personal effects, furniture, clothing, sports equipment and other personal items are covered if they are stolen or destroyed by fire, hurricane or other insured disaster. Most companies provide coverage of 50 to 70 percent of the insurance amount on the structure of a home. this part of the policy includes off-premises coverage. this means belongings are covered anywhere in the world, unless the policyholder has decided not to have off-premises coverage. expensive items like jewelry, furs, and silverware are covered, but there are usually dollar limits if they are stolen. To insure these items for full value, individuals can purchase a special personal property endorsement or float and insure the item for its appraised value.

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Trees, plants, and shrubs are also covered by standard homeowners insurance, usually up to about $500 per item. perils covered are theft, fire, lightning, explosion, vandalism, riot, and even aircraft crashes. are not covered for wind or disease damage.3. Liability protection covers against claims for bodily injury or property damage caused by the insured or family members to others. it also pays for pet damage. The liability portion of the policy pays both the cost of defending the policyholder in court and any court awards, up to the policy limit. coverage is not only at home, but extends to any part of the world. liability limits generally start at around $100,000. An umbrella or excess liability policy can be added to the policy, providing broader coverage, including libel and libel claims, as well as higher liability limits.

4. additional living expenses this pays for the additional costs of living away from home if a home is habitable due to damage from a fire, storm or other insured disaster. covers hotel bills, restaurant meals, and other living expenses incurred while the home is being rebuilt. additional living expenses coverage differs from company to company. types of homeowners insurance policies the different types of homeowners policies are pretty standard across the country. however, states and individual companies may offer policies that are slightly different or have other names, such as “standard” or “luxury.” The one exception is the state of Texas, where policies vary somewhat from policies in other states. The Texas Department of Insurance (http://www.tdi.state.tx.us) has detailed information on its various homeowners policies.

People who own the home they live in have several policies to choose from. the most popular policy is ho-3. provides coverage for the structure of the home and personal belongings, as well as personal liability coverage. it also provides the most extensive coverage, protecting against 16 disasters or perils listed below.

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