The main idea of having home insurance is to derive financial protection from disasters. A home is one of the most prized possessions, which most of you dream through their life about and add up each cent to buy it when the moment arrives.
There is a huge amount of investment that goes into buying a home even if you take it on a loan. But it is as much prone to dangers as you are and can get damaged due to fire, natural disasters, accidents etc.
The best way to protect your home and all things in your home is through homeowners insurance. Home insurance is available in the form of a standard policy that will not only ensure your home but also the things that you keep inside. It also includes coverage for damages caused by household pets. It has been seen that maximum damages can be caused by disasters like earthquakes, floods and poor maintenance.
The homeowner’s policy doesn’t cover poor maintenance as it is the homeowner responsibility but you can get separate policies covering earthquakes and floods.
A standard home insurance policy will provide four different types of coverage and they are:
Coverage for the structure of your home insurance
This home insurance policy covers the repair cost and the cost to rebuild your home due to damage and destruction caused by hurricanes, lightning, fire, hail, and all other sources mentioned in your policy. This policy will not provide coverage for earthquake, flood or poor maintenance.
If you are purchasing this particular policy then it is always good to buy a policy with high enough limits to be able to rebuild your home. Most of these standard home insurance policies also cover structures attached to the home like a gazebo and car garage. The amount of coverage applicable for these structures is normally 10% of the total insurance amount.
Coverage for your personal belongings
Personal belongings include almost everything inside your home like sports or fitness equipment, clothes & apparel, furniture, and most personal items. These are covered under the standard home insurance if they are destroyed in a fire, by a hurricane or if they are stolen.
The amount of insurance coverage applicable on this is generally 50% to 70% of the total home insurance amount. A specific part of this policy called off-premises coverage also provides coverage for your personal items anywhere in the world.
Liability protection – home insurance
The liability protection coverage provides security from lawsuits filed for property damage and even bodily injury that you or your family member may have been responsible for. This policy also covers damages caused by your pet. The liability home insurance policies have a limit and it starts at $100,000.
Additional living expenses
This home insurance policy provides coverage in case you are unable to live in your home due to damages caused by fire or any other disaster mentioned in the policy. It will cover all your living expenses during that period including hotel and restaurant bills.