Are you thinking about purchasing a new homeowners insurance policy? If so, you probably want information about these types of policies and what they cover before you purchase. At Fearnow Insurance, we also want you to understand your homeowners policy before you agree to the premiums.
Understanding the Basics of Homeowners Insurance
Homeowners insurance is a type of policy that is designed to financially protect you in the event of a covered incident. This can include fire, theft, vandalism, and certain weather events. When you experience damage to your home or property that results in the need for repairs or the replacement of items, you file a claim. If the claim is approved, the insurance company covers the cost of the repairs minus your deductible.
What’s Typically Covered in a Homeowners Insurance Policy
Homeowners insurance policies typically cover the home on your property, the outbuildings, and the personal belongings that are stored on and inside the structures. It’s important to note that a homeowners policy only covers individuals who own the property. It does not cover renters. Renters can get a renters insurance policy to cover their personal property.
- Building Coverage – A homeowners insurance policy covers damage to the buildings on your property due to a covered event. Buildings that are typically covered include your house, garage, and a shed. It’s important to disclose all of the structures on your property in order to get an accurate quote and ensure that all the buildings have adequate coverage.
- Personal Belongings Coverage – This part of the policy covers the items you own, including furniture, clothing, and electronics. If you have any luxury items, expensive collections, or jewelry, you’ll need to tell your insurance agent in order to ensure their replacement value is covered.
- Liability Coverage – Liability coverage protects you in the event that someone gets hurt on your property or has property they own damaged while they are visiting you. Some homeowners insurance policies also cover damage caused to others by your pets.
- Additional Living Expenses Coverage – If you encounter an event that leaves your home unable to be occupied until repairs are made, the additional living expenses coverage provides you with some cash to help you pay for a hotel room and food while you wait for your home to be repaired.
What’s Typically Not Covered in a Homeowners Insurance Policy
Damage to your property from floods and earthquakes is typically missing from a standard homeowners insurance policy. If you need coverage for these types of weather events, it is recommended that you purchase separate flood and earthquake insurance policies.
Home insurance policies also do not typically cover issues caused by a lack of maintenance. For example, if your roof is in disrepair due to age or neglect and it starts leaking after the latest rainstorm, your insurance company is not obligated to help you pay for the repair.
Home Insurance Policy Deductibles
Homeowners insurance policies typically have a deductible, which is the amount that you pay prior to the insurance company paying for any repairs to your home or the replacement of your personal property. In most cases, your deductible is a specified amount, like $1,000. This means that if your property experiences $5,000 worth of damage and your claim is approved, the insurance company would pay $4,000. Some homeowners insurance policies may also offer a deductible amount in the form of a percentage. This means that if you filed a $10,000 claim and your deductible is 5 percent, you’d pay $500 while your insurance company pays the remaining $9,500.
Deductibles can help control the cost of your homeowners insurance policy because higher deductibles result in lower monthly premiums. However, it’s important to always choose a deductible that you can financially afford. Claims beneath your deductible amount won’t typically be paid by the insurance company. For example, if you have a $5,000 deductible and someone breaks into your home and causes $3,000 worth of damage and steals another $1,000 in items, the total cost would be $4,000, which means you’d be 100 percent financially responsible since the damages are $1,000 lower than your deductible amount.
Getting the Right Home Insurance Policy for Your Needs
If you need a new homeowners insurance policy, our agents at Fearnow Insurance can help you. We have the experience to listen to your needs and coverage levels and search for policies from multiple carriers in order to help ensure you have the right policy for your home and your personal belongings.
To learn more about our home insurance policies, and other insurance coverages for homeowners and to get a quote, give us a call at 813-981-1604.