Homeowners Insurance is available for new home buyers and long-time homeowners who are looking to start coverage, or just switch providers. For many, purchasing a Homeowners Insurance policy is one of the final steps towards financing a home. Although, it may put your lender at ease knowing that the investment is protected, you should also feel comforted by the protection provided to you – and your things – through a Homeowners Insurance policy.
There are four parts of a Homeowners Insurance policy:
Coverage For Your Home
If your home faces structural damage after a catastrophic event such as a fire or hurricane, then your Homeowners Insurance policy will help pay for the repairs or rebuilding of your home. Other structures on your property that can be included on the policy may include a shed, detached garage, or a gazebo, and you can receive up to 10% of the coverage limit you have set for the structure of your home to rebuild these other structures.
When determining your coverage limit, it is best to opt for a coverage limit that will allow you to fully rebuild your home. In the event your home is completely damaged, and you must start anew, you don’t want to be without the coverage to allow you to do so.
It is important to note that most Homeowners Insurance policies exclude damaged caused by floods, earthquakes, and maintenance-related issues. Although Florida is not a high risk for earthquakes, floods are common, especially during hurricane season. In order to fully protect your home and belongings, you should also purchase a Flood Insurance policy. As for maintenance-related issues, homeowners are fully responsible for countering the “wear and tear” that occurs to a home over time.
Coverage For Your Stuff
Like the structure of your home, your things are also protected against damage caused by a fire, hurricane, or other covered catastrophic event. They are also protected against theft. Coverage can be extended to personal belongings such as:
- Jewelry and Art (High-value items may require additional coverage to be purchased)
- Sporting Equipment
- Appliances (“Wear and tear” and mechanic breakdowns excluded)
The coverage amount for your belongings is determined as a percentage of coverage for the structure of your home, usually 50-70%. So, if you were to purchase a $300,000 Homeowners Insurance policy to protect against damage the to of your home then you would have $150,000 – $210,000 in coverage for all of your personal belongings. This may seem like more than enough to replace your belongings, but if you make a detailed home inventory of all the items you own from your attic to garage, you may actually be surprised!
High Value Coverage:
Regular coverage may limit the amount of coverage to $1,000-$2,000 per item, so for certain items that are usually higher value, such as jewelry, art or furs, you should purchase additional coverage to protect the full value of these items.
Under this section of your Homeowners Insurance policy, optional coverage is available to extended beyond your home. Should you be traveling and have your personal items stolen from your vehicle or suitcase, you can file a claim through your Homeowners Insurance policy for reimbursement.
Credit Card Theft:
Credit theft is on the rise and can happen to anyone. Many Homeowners Insurance policies include up to $500 in coverage against unauthorized use of your credit card.
Coverage Against Liability
Under a Homeowners Insurance policy, you a protected against liability claims made against you or a member of your household. This means that if a guest or a third-party is injured while on your property, you may be held legally liable for their medical bills and other monetary punitive damages. This coverage can also protect you while off-premises. For example, if you are visiting your neighbor’s house during the holidays and your child knocks over and breaks a very valuable piece of artwork, then your Homeowners Insurance policy will pay the liability cost for the repair or replacement value of the item. Other examples of coverage may include scenarios such as:
- Your dog bites the mailman, guest, or other third-party legally on your premises.
- Your child was playing outside and digging holes. A dinner guest falls in one of their holes and breaks their ankle.
- Your brother-in-law injures himself while helping with yardwork.
Coverage for liability can also follow you off of your property. For example:
- You crash your grocery cart into another shopper and they require medical attention.
- You are playing baseball at the local park. Your kid hits a homerun – and knocks out a parent in the stands.
- While golfing, your husband swings and loses the club, hitting the caddy.
Homeowners Insurance can cover the medical expenses relating to injuries you or a member of your family causes (even the four-legged family members). It can also cover legal fees and monetary damages that are awarded in the event you are sued. Keep in mind, that the coverage for the medical and legal costs are limited to the coverage your set for liability protection. Your standard liability coverage under a Homeowners Insurance policy may not be enough for some individuals. For those wanting higher liability coverage, there is Umbrella Insurance.
Coverage For Living Expenses
If you are displaced from your home due to a catastrophe, such as a fire, hurricane, or other covered event, then coverage for Additional Living Expenses will reimburse you for the cost of a hotel stay. Select carriers may even reimburse the cost of other living expenses such as meals.