Homeowners insurance is important to many people and is often required to satisfy your mortgage requirements. But how well do you actually understand your policy? Most homeowners policies can be broken down into six sections.
- Dwelling: This pays for damage to your house and structures that are attached to your house. This includes plumbing, electrical wiring, heating and permanently installed heating and air-conditioning systems.
- Other Structures: This pays for damages to other structures that are NOT attached to your house. Examples of Other Structures are fences, sheds, detached garages, gazebos and guest cottages.
- Personal Property: This reimburses you for the value of your personal possessions and other contents of your home such as your furniture, appliances, clothing and electronics. This can also include damaged or lost items when they aren’t on your property such as items in an off-site storage locker or with your child at college. There is always a limit, usually 10% of the total value of Personal Property, for items off premises.
- Loss of Use: This coverage pays for your additional living expenses while your home is being repaired following a covered loss. These expenses include rent for a place to stay and even some food.
- Personal Liability: This part of the Homeowners insurance covers your financial losses if you are sued and found legally responsible for injuries to someone else or damage to their property.
- Medical Payments: This pays the medical bills for people that are hurt while on your property. This includes people who are hurt by your pets.
In order to be reimbursed for damage to your property, the cause of the loss must be one of the hazards or perils listed in your policy. While the causes of loss can vary from state to state, the typical perils covered in the standard Homeowners policy are the following:
- Lightning Strikes
- Vandalism and Malicious Misconduct
- Damage caused by the weight of snow, sleet or ice
- Falling obects
There are different types of policy forms used for dwellings depending upon the occupancy of the living structure:
- Homeowners: Is used for an owner occupied dwelling. You generally only have a single dwelling as your primary residence.
- Condominium Owners: This is for owner-occupants of a condominium unit. This policy insures some portion of the building depending upon your association documents, as well as your Personal Property and provides Personal Liability.
- Tenant: This is also known as Renters Insurance. The policy provides insurance for your contents, as well as Personal Liability.
- Dwelling Fire: Is used for non-owner occupied dwellings or rental properties. Generally, the coverage is limited to the building and liability as the owner of the property.
Additional types of insurance can be discussed with your agent regarding vacant or unoccupied properties, mobile homes and farms. Additional coverage may be needed if you run a business out of your home. You can also add an umbrella policy to cover expenses that exceed your policy limits with your home or auto insurance.
Flood insurance is not typically included in Homeowners insurance policies and must be purchased separately. You do not have to live in a flood zone to be eligible to purchase flood insurance. However, if you do live in a designated flood zone, your mortgage lender may require you buy flood insurance.
To review your current policy and coverages or to learn more about the different types of dwelling insurance available, speak with an American Heritage Insurance Agent. They can help you decide how much coverage you need and help you understand the limits of your policy. They can also compare pricing with other companies to find you the best coverage for the best rate.