Essentials of Homeowners insurance

While shopping for insurance for your home or reviewing your existing home insurance policy, you might be troubled about how to go about it. There are different home insurance policies, and the average cost of each policy differs based on a variety of factors, including the type of home and location. Also, you should be careful of the company that you get your home insurance from. Always ensure that you shop your cover from reputable companies. Online reviews such as can help you identify a reputable insurance company’s offering home insurance. This article offers some essential and necessary information you need to know about homeowners insurance.

Homeowners insurance comes as a package policy, which implies that it offers coverage both to property damage and legal responsibility for the property damage and any injuries to the policyholders or their family. It also takes account of the damage that is a result of household pets. Though damage that is as a result of disasters is covered, there are exceptions. As far as standard homeowner policies are concerned, they do not offer coverage to earthquakes and flooding. There are four essential types of coverage included in a homeowner’s insurance policy, and these include:

Personal belongings coverage

Homeowners insurance provides coverage for clothes, sports equipment, furniture and other personal items; if they are destroyed by insured disasters such as hurricane and fire, they are also covered if they are stolen. A majority of insurance companies provide a 50 to 70% coverage of the insurance amount on the home’s structure, and the policy also includes coverage of off-premises, which means that irrespective of the location worldwide, belongings are covered, except only if the policyholder decided not to take off-premises coverage. Expensive items, including furs, silverware and Jewellery, are also covered, but there are Euro limits if they are stolen. Purchasing a special property endorsement will help you insure these expensive items to their entire value. Standard homeowners insurance also covers scrubs, plants and trees up to about €400. Perils covered include fire, theft, explosion,  riot, theft and falling aircraft. Damage by disease or wind isn’t covered.

Liability protection

Liability offers protection against lawsuits for property damage or bodily injury that the policy holder or their family members can inflict on other people. It will also pay for the damage that pets cause. The liability part of a homeowner’s insurance policy pays both for any awards that the courts may offer and the cost of defending. Limits of liability protection typically begin at around €90,000. There is an excess liability policy with generally more comprehensive coverage and covers slander and libel claims. It can also include higher liability limits.

Coverage for the structure of the home

If a home is destroyed or damaged by hail, fire, lightning hurricane, this part of the policy offers to rebuild or repair a home for such. However, damage caused by earthquake, flood and routine wear and tear isn’t covered by this part of the policy. A majority of standard policies also cover structures not attached to the house, such as a gazebo, garage, or tool shed.

Additional living expenses

If a house becomes inhabitable due to various reasons such as damage by a storm fire or other insured disaster, this portion covers the additional living costs. It covers restaurant meals, hotel bills and other living expenses experienced while rebuilding the home. Insurance company coverage for these additional living expenses differs from one company to the other.

Home insurance levels of coverage

Home insurance includes three main coverage options:

The actual cash value

In this policy, the cost of replacing the home and your possessions minus depreciation deductions is covered.

The replacement cost

In this policy, the cost of replacing possessions and rebuilding a home without a depreciation deduction is covered.

Extended/Guaranteed Replacement costs

With this policy, a homeowner will enjoy the highest level of protection. They’ll get paid for whatever the cost of rebuilding was prior to the disaster, even if it surpasses the limit of the policy. This offers protection from abrupt increases in construction costs due to building materiel shortages in cases or unanticipated situations such as a prevalent disaster. It, however, doesn’t cover cost such as upgrading a house to meet the terms of recent codes of building. Nevertheless, there is an addition to this policy, referred to as law or ordinance, to help meet these additional costs. Specific insurance company will offer an extended and not a guaranteed replacement cost policy. This policy type will certainly pay a particular percentage of the limit of rebuilding the house. Both the extended and guaranteed replacement cost policies are more costly but provide the best financial shield against a home’s disaster. The coverages may, however, not be offered by all insurance companies.

In conclusion, as a new homeowner, you may want to get insurance for your home but have little or no information about what homeowners insurance entails. With this article, the essentials about homeowners insurance are provided.