What a Homeowners Insurance Policy Covers

Your home is, without a doubt, the single largest investment you will ever make. As such, although it is not only usually required if you owe on it, it is a wise idea to make sure that your home is properly insured. If disaster – which could be anything from a wildfire to a flood – should strike, the last thing you need is to find that your house was not properly insured. It is important that you make sure your homeowner’s insurance policy is in order now, so you won’t have to worry later.

What Policies Cost

What your homeowners insurance policy covers is going to vary, depending upon your insurance carrier. All plans are different, and each offers a variety of options to meet the need of each homeowner. For example, the Insurance Information Institute (III) reports that the average annual premium for a homeowners insurance policy in the United States is $804.

Keep in mind that this is an average; that the cost also varies by state, as do the possibilities for home disasters that may exist. While the yearly premium average in California is $937, it’s only $477 in Idaho, and $1,386 in Florida, where there are hurricane threats.

What They Cover

According to III, there are four basic types of homeowners coverage:

• Home structure – This will repair or rebuild your damaged or destroyed home structure if it was caused by such things as fire, hurricanes, or other such disasters that are listed in the agreement.
• Personal belongings – This covers your personal items within the home that may need to be replaced, depending on the type of disaster or theft covered. The amount covered depends on the value determined when setting up the policy. You can conduct a home inventory to get an idea of the value of your home’s contents.
• Liability coverage – This type of plan covers you if someone is injured at your home. Whether they were bitten by a pet, or suffered a fall because of a damaged step on the porch, it will cover the expenses (which may be medical) associated with the incident, up to the limit set forth in the policy.
• Living expenses – Some plans offer additional living expenses. This is beneficial if you have been displaced due to fire or other disaster and need another place to live while your home is being repaired.

Getting Covered

If you don’t already have one, consider putting a homeowner’s insurance policy in place that provides the type of coverage you may need if something happens. If you are a renter of any type of dwelling, you should have renter’s insurance, which will cover your personal property.

Start by gathering quotes and comparing what each company offers for the price. Keep in mind that you can try to save some money by seeking higher deductibles, getting all your insurance policies with the same company, and maintaining a good credit score.