Home Owners Insurance
Homeowners Insurance
Homeowners insurance provides you with financial coverage for damage to your property, as well as coverage for liability for injuries and damage for which you are legally liable if certain conditions exist. You pay premiums to an insurer to protect you against covered claims up to a set dollar amount, based primarily on the value of your home and belongings. Sounds good? It is, so read on to learn more about the details.
What this insurance covers
When comparing policies, it's important to know what you should expect from a typical homeowners policy, so consult a professional. Your coverage should protect you for the replacement cost of the structure of the home itself, your belongings (e.g. clothing, furniture and electronics), liability for harm to others, and living expenses if you must vacate your home after an insured incident. As you might expect, homeowners insurance does not cover everything. Number one, there may be dollar limits in some categories of coverage. While big ticket items like jewelry and watches are covered, there will typically be a cap on the payouts if they are stolen. This includes hard-to-value items like antiques and collectibles, and business assets. Some events, both natural (like floods and earthquakes) and man-made (like wars) are also excluded. Take time to research specific items of exceptional value. If they will not be covered for the full value under your homeowners policy, you may be able to take out a special policy or buy an extension to your policy to cover them.
Types of Homeowners Insurance
Home insurance standards differ somewhat from state to state. However, insurers in most states use a number of standard forms for the various types of policies that they offer.
For single family homes and townhouses
If you own your home and do not have any common areas protected by a condominium or co-op association, you have a few policies to choose from. The most popular policy is the HO-3, which provides the broadest coverage.
For owners of condos and co-ops
Condo and co-op owners have a unique combination of coverages to protect their homes. Since there are common areas in these types of buildings, the board should have a policy to cover the overall structure and grounds. A policy known as an HO-6 provides coverage for the interior of your unit including bathroom fixtures, built-in kitchen appliances, as well as your belongings. A condo policy provides coverage for liability for injuries caused to others or their property for which you are legally liable.