Basics of Homeowner’s Insurance

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Like car insurance, homeowner’s insurance is a necessity in today’s society. Homeowner’s insurance will protect not just you, but your belongings as well. Again, like car insurance, homeowner’s insurance can be incredibly complex and difficult to understand. It can be boiled down to a few simple elements however, which we will help you learn about.

Home Damages

This should be the backbone of any home insurance policy, after all, your home is your home! Typically, home insurance policies will cover any damages or repairs as a result of fires, hail, or lightning. Check the specifics of your policy, as some disasters may not be covers. Floods and earthquakes often require additional coverage.

Personal Belonging Protection

This protects your personal belongings in the event of theft or damage. Personal belonging coverage usually amounts to 50 to 70 percent of the amount of coverage you have for your home. If you have been hoarding diamonds, you may way to look into additional coverage. Some policies even include off-premises coverage. This means that your possessions are covered even outside your home. It is normal for this coverage to be more limited than your standard on-premises coverage.

Liability Coverage

Liability coverage protects you from the cost of lawsuits which may result from injuries or damages that occur on your property. Your Liability coverage should cover not just the cost of your defense in court, but also any court order awards that are handed out. Like with most insurance, there is a limit to the coverage. The higher the premium you pay, the more coverage you will have. These limits typically start around $100,000 but it is recommended you maintain coverage of at least $300,000 as lawsuit costs can sometimes rise extremely high. Some policies also include no-fault medical coverage. This is useful if a friend is injured in your home. They will not have to fill a lawsuit, but can rather submit medical bills directly to you insurance company.

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