Understanding your homeowners policy is easier when you’re familiar with some important coverages that can protect your property and finances. Here are four key terms to keep in mind:
Personal Liability
Personal Liability protects the insured if you are found to be legally responsible for accidentally causing bodily injury or property damage to a third party. It protects you both while on your property and more importantly goes with you off your premises. It can help pay for medical bills, legal expenses, settlements, and court judgements. Coverage generally extends to members of your household.
Home Businesses Liability
Running a business from home requires more than a standard homeowners policy. In fact, some -home based businesses can void your regular coverage. Depending on your needs, you may need a Business Owners Policy, Business Personal Property Insurance, Business Interruption Coverage, Commercial Auto, Cyber Insurance or maybe even Workers’ Compensation. Always clarify requirements with your insurance agent before starting a “home business” to stay protected.
Refrigerated Products
This is coverage that protects food and other perishable items in a refrigerator or freezer that spoil due to a power outage or mechanical breakdown. Refrigerated Products coverage is often found in a “property endorsement or property extension” of the policy and has a limit of often around $500 to $1,000.
Incidental Farming
If you engage in small-scale hobby farming, or operate a part-time farm business on your property, this coverage addresses liability, farm personal property, and other farming-related risks that a standard homeowners insurance policy will not cover. Coverage varies based on the insurance provider, so it is important to consult with your insurance agent to make sure you have the proper coverage. For some insurance companies, personal liability coverage is only available if the farming operations are conducted on 20 acres or less of land, if the farm consists of 10 animals or less, and if the income derived from the farming operations are not a primary source of income or a primary occupation.
By understanding these specialized terms and discussing them with your independent insurance agent, you can tailor your policy to match your lifestyle and avoid unexpected gaps in protection.