Home Insurance

Homeowners insurance keeps you from financial losses when disaster strikes your home. A standard policy insures the house and all the things you keep in it.

Homeowners insurance can be bought as a package policy that covers the damage to your property and any liabilities or financial responsibility for any injuries that you may have. It also protects you when you or your family members cause damage to other people's property (including damage caused by household pets).

Damages caused by natural disasters are also covered with a few exceptions. These are that you must buy separate insurance for earthquakes and floods. Also maintenance related problems are wholly the homeowner's responsibility.

A standard homeowner's policy includes four primary and essential types of coverage.

These are

1) Coverage for the structure of the house This coverage pays you to repair or rebuild your home if it has been damaged by hail, fire, hurricane, lightning and any other disaster specified in your policy. Any damage caused by floods, earthquake and routine weathering will not be covered. When you buy coverage, make sure you buy enough to rebuild your house completely. Structures that stand outside the main structure, like garages, tool sheds and swimming pools are also covered in most policies. These structures are generally covered for about 10% of the amount of insurance you own on the structure of you home.

2) Personal belongings All your personal belongings like your furniture, electronics, sports equipment, clothes and other items are covered if they are stolen or destroyed by disasters like hurricanes, fire or other disasters specified in your policy. The coverage provided by most companies is around 50% to 70% of the insurance you have on the structure of your home. To determine if this coverage is enough for your home compile a home inventory. The off-premises coverage is included in this part of the policy. The limit for this is sometimes 10% of the amount of insurance you have for your possessions. Unauthorized use of your credit cards are covered for up to $500. Expensive household items like jewelry, silverware and furs are also covered but incase of theft they have dollar limits. These items are generally covered for $1000 to $2000. Insuring these items to their full value will require you to own a special property endorsement and insure the item for it's appraised value. The coverage also includes "accidental disappearance" which means that simple loss of the item will also be covered. There is no deductible for this.

Also covered here are all your trees plants and shrubs. These are generally covered for 5% of the insurance of the house - up to $500 per item. The disasters covered are fire, theft, hurricane, explosion, lightning, vandalism, riot or even falling aircraft. Coverage for wind and disease are not part of the plan.

3) Protection of Liabilities This coverage protects you against lawsuits for bodily injury or damage of property that you or any of your family members cause to other people. It also includes damage caused by your pets. So, if your child or dog accidentally breaks your neighbor's vase, you are covered. However if they break your vase, you are not covered. The liability part of you policy means that your policy pays for both the cost of defending you in court and any court awards- up to the limit of the policy. You will be covered anywhere in the world and not just your home. Liability limits generally begin at $100,000. But experts recommend that you purchase a liability of $300,00. All policies also provide no-fault medical coverage. In case your friend or neighbor is injured in your house, he or she can submit their medical bills to you insurance company. Expenses can thus be paid without them filing a liability case against you. This coverage is generally worth $1000 to $5000. It does not pay medical bills for your family or your pet.

4) Additional Living Expenses If you are living away from home because your home has been damaged in a fire, storm or other insured disasters, the expenses will be taken care of by your Insurance company. Hotel bills, restaurant meals and other living expenses that are incurred while your house is being repaired. This coverage differs from company to company. Many policies provide 20% of the insurance on your house as this coverage. This can, however, be increased for an additional premium. Some companies provide policies that provide you with unlimited amount of loss-of-use coverage but restrict it to a limited amount of time.

If part of your house was rented, the insurance company will also compensate you for rent lost by you.