Homeowners Insurance is protection for the home filled with our family and assets from various risk factors. It is not a mandatory requirement to purchase this insurance for any homeowner, unless they have a mortgage on the house. It’s advisable to be proactive and get adequate coverage than to be reactive and spend a much higher sum in repairs and/or replacements.
Homeowners Insurance is a variety of Property Insurance for individuals that can be customized and/or packaged based on the risk analysis associated with each specific home. The basic purpose of the policy is:
To provide coverage for the house itself and its insured contents when damaged by a covered
cause or event
To take care of the liability of the insured homeowner and/or the family members, including
house-pets for any damages and/or injuries caused to others by them.
There are different types of Homeowners Insurance coverages available on the market, each focusing on different issues. The broad classification is described below:
Coverage for Dwelling
This is to protect the home’s structure along with any added part, like a deck, or an attached
garage. It provides cost of repair or replacement for the home and necessary fixtures for
electrical, heating, air conditioning and plumbing purposes.
Coverage on Other Structures
This is to provide similar protection towards any additional structure that lies within the
home’s compound, but is a separate entity, such as an outhouse, fence, etc.
Coverage on Personal Properties
This is designed to provide protection for the contents inside the house. All the valuable
assets present in the house can be insured using this policy.
This is to protect the house someone is not owning, but renting. The personal properties of
that person in that house may face similar risks as the point stated above. But since the
house itself is not that person’s own property, the insurance contract details is different in this case.
Coverage on the insured homeowner’s liability
This is a contract somewhat similar to Personal General Liability Insurance. If the homeowner
or any of the family members, including the house pet cause any loss, damage or injure other
people and/or their property, then this insurance will help the insured pay for the medical
and legal expenses.
Coverage on Natural Disasters
Typically, most Homeowners Insurance contracts extend coverage for a few natural disasters
such: fires (including wildfire), lightning strikes, windstorms (including tornado, hurricanes,
etc.) and hail. However, coverage against flood and earthquakes are not part of the coverage
in most cases. People residing in areas prone to flood and/or earthquakes should opt for
separate insurance coverage to take care of the damages caused by these natural disasters.
Coverage on Loss of Use for the insured home
This coverage is designed to take care of the expenses in the unfortunate event of a house
being temporarily out of commission due to damages under a covered cause. The boarding
and day-to-day cost of living outside the house will be covered in this case.
Additional coverage options
Some insurers tend to provide different ranges of extra coverage for the personal properties
and/or the additional damages to parts of the house
A house becomes a home when the residents decide to make it personal, and make it their own. People go through ups and downs to create a home out of a house - accumulating money to buy it, then the necessary fixtures of electricity, heat, plumbing, etc. Then comes the planning and execution of the home décor, furniture, and other assets. All these efforts, expenses and memories make a home truly precious to its residents, even after the monetary factors are taken care of. Homeowners Insurance coverage options actually cater to a much deeper level than just a financial backup plan for the house and its contents. These coverage options are designed to protect the physical house and its contents along with ensuring that the homeowner goes through a minimum of hassles in case of a misfortune striking their home.
Points to note
There is fine print in a Homeowners Insurance contract. There are various incidents that may cause damage to a home, but not all may be listed in the contract provisions. It is highly recommended to get in touch with a reliable and authorized insurance consultant to know exactly what is covered and to what expect before filing a claim with an insurer.
Also, here’s a word of caution to the small business owners who operate from their homes. The Homeowners Insurance does not cover damages to any business property present in the insured house, even if the cause was a covered event, unless otherwise mentioned specifically in the contract. So, it’s required for such business owners to opt for separate insurance coverage for those business personal property only.
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