You probably know by now that if you own a home then it is a wise decision to buy insurance to cover it. A home is one of the biggest purchases you will make in your life and it is best to protect that investment to your best ability. Home Insurance is a type of insurance policy that will cover your home from damage. There are several different policy types ranging from basic liability to full coverage that will cover anything inside the home. There are also policies that will cover natural disasters, theft, vandalism and fire. It is always best to review your policy before assuming your are fully covered under natural disasters.
Standard Homeowners Policy covers 4 basic areas of your home. There are several different types of policies and it is good to know what policy you have so that you know what is covered exactly. The first one is the actual structure of your home. It will be replaced or repaired if it is damaged by hail, fire, hurricane, lightning or any other natural disaster. It is always best to look in your policy to see exactly what natural disasters are covered because sometimes they exclude certain situations.
The second thing that is usually covered is personal belongings inside the home. Usually around 50% to 65% of the houses belonging will be covered for damage. For example if you have a policy that is worth $200,000 for your home then anywhere from $100k-$130k will be covered for the personal belongings inside the house. It is best to evaluate your personal items and see if this is enough coverage. You can do this by taking a personal inventory of the more expensive items and just estimating the value on the smaller items. This will give you a good idea of how much value is inside your home. Some of the things that will be covered at electronics like DVD players, surround sound systems, big screen TV’s and computers. Other misc. items like clothing, sports equipment, furniture and personal items will be covered under personal items. More expensive items like jewelry or gold are usually covered, but there is a dollar limit on these items. A common dollar limit will be between $1000 and $2000 total.
Liability protection is also very important because it will protect your family from lawsuits or other problems. For example if your son accidentally ruins a neighbors carpet then you would be covered under your homeowner’s policy. Now if your son ruined your carpet then it wouldn’t be covered. The nice thing about liability coverage is you are not only covered inside your own house, but all over the world. Most of the liability policies will start around $100,000 of coverage. We actually recommend at least $300,000 of coverage because it is actually very affordable and will be well worth it if anything were to ever happen. Your court costs and any judgments will be covered by your insurance company. Also if someone is injured in your home or on your property then it will be covered under your insurance. They would submit bills to your insurance provider.
Additional living expenses are also one of the 4 things that are covered under your homeowner’s policy. This is a great feature that will come in handy if you ever have to leave your house and live somewhere else. Basically if the house is damaged because of a disaster then the insurance company will pay for your stay in a hotel until the house is livable. Meals and living expenses will be paid for by your insurance company. Usually this amount is about 20% of your homes coverage. So if you have a $100,000 home policy then you would have about $20,000 available for this type of occurrence. You can also get certain policies that have unlimited coverage or a larger amount covered. This will also covers a person who rents out their home. So if the tenants have to move out they will pay your tenants the money.
