Homeowners Insurance: Cover Your Residence for Rainy Days

Your home is your most expensive and valuable asset. Most foreseeable events may not be preventable, but the damages caused by them can be compensated through homeowners insurance.

Home insurance is designed to protect your house and personal belongings from financial losses that occur from damages including theft and vandalism. Your policy also extends its protection to your garage, gazebo, and other structures on your property. While the usual homeowners policy will protect your home and other valued possessions from standard events such as riots, theft, or fire, you may also choose additional endorsements such as liability and medical payments.

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Why do you need Homeowners Insurance?

Most would argue that a house is the most expensive thing a person will ever buy in their lifetime. A house protects you, your loved ones, and your possessions. If fire or theft damages your home, your quality of life and your finances suffer. Does it not seem smart to get your most expensive purchase insured? A study by the National Fire Protection Association mentions how the US fire departments respond to an estimated average of 172,900 house fires that were started by kitchen/cooking-related activities.

For example, while you were out having dinner, a massive fire starts in your kitchen and makes it to your bedrooms. The fire has damaged everything, and now you will need to replace these items out of pocket.

However, with homeowners insurance coverage, you wouldn’t be paying for renovations and replacements; your insurance will take care of it for you. Additionally, it will cover a portion of your hotel bills while the insurance covers your home renovation. 

 

Who needs It?

While you may think that your home doesn’t need home insurance, it may not be the case. If you have a mortgage, your loan providers will most certainly ask for evidence of insurance. If you are one of the lucky people who do not have any mortgage, it is just smart to protect your property.

What are the Homeowners Insurance coverages?

Dwelling

A standard homeowner’s insurance will cover expenses to rebuild your home if  damaged by named perils such as fire, theft, robbery, etc.

Your homeowners insurance agent will explain that you will receive coverage for all damages caused by perils once you get your home insured. Your policy extends its protection to your garage, gazebo, and other structures of your home. But a standard policy will not cover damages caused by earthquakes, floods, etc.

Suppose heavy rain and hailstorm shatter your windows, and you need to get them fixed. In this case, your standard policy will cover all expenses of repairing your windows.

For example, an earthquake damages your walls while you have a standard policy in place. In this case, you will be paying out of your pocket, and the insurance agency cannot compensate you for it.

Personal Property

Personal property will cover any injury or damage that you and your family members can legally hold responsible for.

Suppose a handyman visits your place to fix a broken TV and falls on your faulty stairs. The fall results in a leg injury and a damaged phone. Now, not only is he injured, but he has faced property damage and lost the ability to work as well. You will be held liable for his medical bills, lost income, and damaged phone.

With homeowners property insurance, you will be able to pay off the handyman. This coverage will also pay for any legal fees should the handyman decide to sue you. The coverage includes personal property such as jewelry, art collection, clothes, and other personal items stolen in a robbery and other perils.

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Other Structures

If you are under the impression that homeowners insurance only covers the house and nothing else, think again. Your standard policy will provide coverage for any detached property, such as a shed or fences. You will receive compensation for any harm that comes to your detached property due to the perils covered by your policy

The standard coverage for your structures is typically 10% of the total amount of your home insurance. If your home is insured for $100,000, your other structures will be insured for $10,000.

Additional Living Expenses

If you cannot live in your property because of damages, with standard homeowners insurance, you will be covered for expenses of having to live away from home while the damages are being repaired.

For example, a massive fire breaks out in your home, which engulfs your living areas. You cannot live in your home because the fire has destroyed all living space, and it needs to be rebuilt completely. You and your family now need to live away from home temporarily while it is being renovated. Your insurance agency will pay off your bills for the period of the renovation of your dwelling.

Guest Medical Payments

Your standard homeowners policy protects even your guests! Your guests may befall upon an injury while visiting your home. Suppose they happen to touch a faulty wire, which results in them being electrocuted. Guest medical payments coverage will help you pay for the medical bills of your guest.

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The Exclusions of Homeowners Insurance

While home insurance is one of the broadest forms of insurance coverage, it is not all-encompassing. There are some occurrences that your homeowners insurance provider may not cover.

Here are some of the general exclusions in a homeowners insurance policy:

  1. Earth movement
  2. Ordinance of law
  3. Flood, tidal waves, tsunami, surface water
  4. Power failure
  5. Nuclear hazard
  6. Intentional damages
  7. Confiscation and destruction of property by the government authority
  8. Natural wear and tear, mold, and infestations

What are the types of Homeowners Insurance?  

It may surprise you, but there are eight different types of homeowners insurance policy, each ranging from basic coverages to the most obscure.  

HO-1 Coverage

This is the most basic form of homeowner’s insurance coverage. It will cover your dwelling from damages due to fire, hailstorm, riots, theft, vandalism, smoke, falling objects, and aircraft. Homeowners may choose this form as affordable home insurance. However, this option will not cover your expenses if you are held liable for third party injuries in your property.

HO-2 Coverage

This coverage is like an upgrade from the HO-1 coverage because it gives all the previous one’s coverages with additional few named perils:

  • Freezing
  • Sudden damages to built-in appliances
  • Weight of ice and snow
  • Volcanic activities
  • Sudden damages from the artificial electrical current generated by an appliance

HO-2 coverage is generally a broader form of homeowners insurance coverage than the previous one.

HO-3 Coverage

This is a special form of coverage, which is the most common among single-family home policy owners. It covers both the home, attached, and detached property. In short, all risks are covered in this policy. You receive coverage for property loss, liabilities, medical bills, natural perils, theft, vandalism, and robbery.
You may also ask your homeowners insurance broker to add a replacement-cost endorsement, which costs you an additional amount of money. Still, some companies add it as a base policy.

HO-4 Coverage

More specifically known as renters insurance, HO-4 coverage is for people who choose to rent homes, condos, and apartments. The coverage is the same as HO-2 and HO-3 coverage policies. Since the renters don’t own the dwelling, this insurance instead covers for damages to their property.

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HO-5 Coverage

HO-5 coverage may very well be an all-inclusive and thorough form of insurance policy available to homeowners. All the perils covered by HO-3 coverage are covered in HO-5 policies. But it also protects your personal belongings from events that are not expressly named in the policies.
Talk to your homeowners insurance agent about premiums and coverages before you make any decisions, though, as the premiums for HO-5 policies tend to mount higher than any other policy.

HO-6 Coverage

You may recognize this policy better as condo insurance, which fits people who reside in condominiums. It covers damages to the structure of the building, common areas, and the units you live in. Your coverage protects you from damage to personal property, loss of use, medical payments, and loss assessment coverage—renovations and improvements made to the dwelling. Meanwhile, the coverage covers your condo.

HO-7 Coverage

Mobile homeowners also need protection from perils. Hence, the homeowners policy introduced the HO-7. This coverage is essentially an HO-3 policy, but for mobile homes. Some of the mobile homes covered in this policy are:

  • Modular homes
  • Sectional homes
  • Park model homes
  • Trailers

HO-8 Coverage

HO-8 homeowners insurance is a specific type of insurance policy for homes that do not meet insurer standards. You may be living in a house that may be older and at a higher risk of loss due to outdated appliances and materials. Your dwelling may need a lot of upgrades and renovations to qualify for insurance coverage in the first place. Thus, HO-8 was introduced as remedial insurance coverage for such kinds of homes.

Find an agent near you and start your insurance journey today. 

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Multiple coverage options on your fingertips.

Choose from various options and select the policy
that best suits your requirement.