Home Insurance Is A Package Policy
Homeowner's insurance is purchased in a package policy. A package policy means that it covers both damage to your property and your liability or legal responsibility for any injuries and property damage you or a member of your household cause to other people. Homeowners insurance also covers damage caused by household pets.
A homeowner's insurance policy covers many kinds of accidents and disasters, however, there are some exceptions such as floods, earthquakes and poor maintenance (Also known as wear and tear). If you want coverage for floods or earthquakes, you will have to purchase separate policies. Also, maintenance-related problems are the homeowner's responsibility to take care of. In fact, keeping up with the maintenance of your home will help to reduce the likelihood of a loss in the future. A good example of this is the replacement of a roof that is showing signs of wear.
Overall it is very important to have homeowner’s insurance coverage that suits your specific needs. You never know when a loss is going to occur, and you are going to need the money to fix it.
Remember that standard homeowner's policies do not cover flooding, so you will have to purchase that separate through your homeowner's insurance agent. Discuss all of the possible exposures with your agent, broker, or insurance company.
Replacement Cost
Replacement cost coverage is available for the structure of your home; This allows you to repair the home to the state that it was before the damage took place. Actual cash value coverage is replacement cost less depreciation. The older your possessions are, the less you will recover from the homeowner's insurance company.
Renters Insurance
Not only is insurance coverage available for homeowners, but it is also available for the people who rent apartments or houses. If you rent a house and you have a renters insurance policy, you will be covered in the event of a loss. The coverage for a renter is relatively inexpensive and will cover your property, your liability, and loss of use of the home due to a covered loss.
Coverage Types
The standard homeowner's insurance policy includes four different types of coverage.
- The coverage for the structure of your home is offered by the homeowner's insurance company. This means that they will repair or rebuild your home in the event of a covered loss.
- The coverage for your personal belongings that you have in your home is also covered by the homeowner's insurance company. This means in the event of a claim that is covered by your insurance policy; your personal belongings will be able to be replaced. Note: It is a good idea to carry replacement cost coverage for your contents. This way, your items are not depreciated if there is a loss. With replacement cost coverage, your property can be replaced with items of like kind and quality.
- Liability protection covers you in case of a lawsuit against bodily injury or property damage that you are your family members caused to another party.
- Additional living expenses if you are temporarily unable to live in your home because of an insured disaster.