What is homeowners insurance?

A form of property insurance that covers losses and damages to an individual's house and assets in the home is homeowners insurance. The policy usually covers interior damage, exterior damage, loss or damage of personal assets, and injury that arises while on the property. The policy has a liability limit, which determines the amount of coverage the insured has if an unfortunate incident occurs. When a claim is made on any of these incidents, the homeowner will be required to pay a deductible, which in effect is the out-of-pocket cost for the insured.

What’s not covered by homeowners insurance?

The home insurance doesn’t cover everything especially activities like acts of gods or acts of war such as earthquakes or floods. A homeowner who lives in an area prone to these natural disasters may need to get special coverage to protect his or her property from floods or earthquakes. However, most basic homeowners insurance policies cover events like hurricanes and tornadoes.

Types of homeowners insurance

For homeowners who want basic protection, an H03 policy will suffice. But for homeowners looking for the most protection and the highest coverage limits, a premium H05 policy is the best bet.

• Basic H03 policy:

H03 policies are the most common policy and they generally cover damage to your home from any cause except those the policy specifically excludes, such as an earthquake or flood. However, where it concerns your belongings, an H03 policy typically covers only damage from 16 named perils unless you buy extra coverage. Some of the perils that may be included in H03 are vandalism, damage from thawing ice, mold, theft, and volcanic eruption.

• Premium H05 policy:

With a premium H05 policy, all risks to the building structure are covered, but all personal property, or everything in your home, is also covered unless it falls under the list of perils that you have chosen specifically to exclude.

Coverage and Deductibles:

Each coverage in a homeowners insurance policy is subject to a limit meaning the maximum amount your policy would pay toward a covered loss. You may be able to adjust your coverage limits to your needs taking into account, mainly the value of your home and belongings and how much it may cost to repair or replace them if they are damaged or destroyed by a covered risk.

In most cases, you’ll typically have to pay your deductible before your insurance benefits kick in to help cover a loss. Read your policy or contact your agent to review your coverage limits and deductibles and also you can typically adjust them to fit your needs.

Conclusion:

We have discussed what homeowners insurance is. Homeowners insurance is not usually required by state law, but it is a great thing to have as a way of protecting your home and belongings from the unknown and thereby avoiding paying for costly damages.