The homeowner insurance coverage protects you from damages caused by man-made and natural disasters. Liability expenses are covered if a person is injured and sues your home for damages.
What's covered by the policy?
Many home insurance policies include coverage for the structure of your home and your personal belongings. But some homeowners require extra protection to cover specific perils. People who live in flood-prone areas or those at risk of earthquakes may opt for separate policies.
HO-1 Coverage - Dwellings, Other Structures
This is the basic type of home insurance, which includes coverage for the home itself as well as the other structures on the property, such as the garage or shed. In most cases, it pays to replace your home, including its contents, to a limit set by the insurer. This insurance covers many other perils including fire, smoke, wind, ice, hail, lighting, vandalism, and theft.
The HO-2 coverage: Personal Liability and Other Contents
This type of policy is more comprehensive than HO-1, providing coverage for a wider range of other items, such as jewelry, fine arts or electronics, that might be lost in an event covered by your standard homeowners policy. Some policies offer coverage for your personal liability. This can include things like dog bites and slip and fall accidents.
The Replacement Cost Dwelling Policy
This option is recommended by most homeowners because it pays for the rebuilding of your home, including its contents, to a specified percentage of actual cash values (ACVs) of damaged items. This option is more expensive than cash value policies, but it can restore your home back to its original condition.
Selecting the Right Deductible
Your annual premiums are lower the higher your deductible. It is beneficial to have expensive and valuable possessions at home, which are difficult to replace. They would also be subject to depreciation.
How to Choose the Right Coverage?
The standard homeowners insurance policy includes both the actual cash value and the replacement cost coverage. However, most companies will allow you to upgrade either of these options at an additional charge. Most homeowners prefer replacement cost coverage, as it will reimburse them for their full item replacement costs minus depreciation.
Choosing a Good Insurance Company
While many companies claim excellent customer services, consumers often have negative experiences with the insurance firms they deal with. The best way to determine which company is a good fit for you is to ask questions about the insurer's retention rate and consumer satisfaction data.
Does Home Insurance cover Damage to Other People's Propertys?
Some homeowners policies offer additional coverage to cover damage to the property of others. This could help with temporary living or lodging expenses while a home is being repaired or renovated. Families that lose their homes due to natural disasters like fires or hurricanes can greatly benefit from such coverage.