Homeowner insurance is an insurance policy that covers a private residence. It combines various personal insurance protections including damages to homes and its contents. The question is what coverage this homeowner insurance policy provides?
The answer is that it provides four types of coverage which are:
- Structure of home coverage
- Personal belongings coverage
- Liability Protection
- Additional living expenses
1. Structure of Home
It happens to all the countries that flood or other type of natural disasters hit your country. They cause a lot of damage as well especially to common people as their houses devastate. This is where homeowner policy comes in. It will pay you for the rebuilding of your house hit down by fire or natural disaster. Thing to be noted that it will only pay about the disasters listed down at the time of policy purchasing. It is important to remember this guideline that purchases enough policy that may rebuild your home. Some detached structure coverage is also included in some policies which are about 10% of the entire homeowner insurance policy.
2. Personal Belongings Coverage
Some policies also cover your personal belongings like clothes furniture and sports etc. if they are lost by theft or destroyed by fire. The coverage is generally 50 to 70 percent of the insurance on the structure of your home. The best way to determine if this is enough coverage is to conduct a home inventory. Personal belongings coverage sometimes also includes items stored off-premises. So, it gives you a great advantage that you are covered regardless of where in the world you are.
Trees and plants are also covered by this policy usually by $500 per item. But if they are damaged by wind or disease, they are not covered. Expensive items like jewelry are also covered but according to the dollar limits. Unauthorized use of credit card is being covered by $500.
3. Liability Protection
Liability protection covers you against lawsuits for damage you cause to other people. The damage caused by your pet is also covered by liability protection. The liability portion of your policy pays for both the cost of defending you in court and any court awards—up to the limit stated in your policy documents. The limit of liability protection starts from $100,000. But it varies from people depending upon their assets. If somebody has any properties and assets, this coverage is certainly not enough and high coverage is needed. It also pays for the injury happen to somebody at your home but it not pays for the medical bills for your family or pet.
4. Additional Living Expenses
Additional Living Expenses pays the additional costs of living away from home if you cannot live there due to damage from a an insured disaster. It covers hotel bills, restaurant meals and other costs, over and above your usual living expenses, incurred while your home is being rebuilt. These kinds of policies may have a time limitation.
If you have rented part of your house, this policy will cover the rent you have collected in case your home is not destroyed. If your home is destroyed than it will pay you for rebuilding of your house in some limits.