What is homeowners insurance?
Homeowners insurance is a type of property insurance that covers private residences. It offers financial protection in case of an accident, theft or disaster involving your home.
A standard homeowners insurance policy typically covers structural damage, personal belongings, liability and additional living expenses.
1. Structural damage
This is one of the key differences with homeowners vs renters insurance. In the case that your home suffers damage from theft, vandalism, or is destroyed by disasters such as fire, windstorms, hail, lightning or explosions, homeowners insurance can cover the costs of repairing or rebuilding it.
Your mortgage lender might refer to this as hazard insurance, but don’t let that trip you up. It’s just part of your homeowners policy.
Most policies also cover detached structures that are separate from your house, such as a garage or tool shed. These structures are generally covered up to a percentage of the insured value of your house’s physical structure, for example ten percent.
2. Personal belongings
Personal belongings that are stolen, damaged, or destroyed by an included disaster on your policy are typically covered. These may include:
● home decor
● wine and spirits
● sporting goods
● children’s toys
Your level of coverage for personal belongings will generally be a percentage of the home’s insured value. So if where you reside is insured up to $100,000, and personal belongings coverage amount was to be 50 percent of this, the limit would be $50,000. The actual percentage used will vary from policy to policy.
Your homeowners insurance policy will also cover belongings that aren’t inside the property but included on your property: trees, shrubs, BBQ grills and patio furniture and so forth.
High-value items, such as jewelry, furs, artwork and antiques are usually covered in a standard policy. There are assigned dollar limits, so you’ll want to read the fine print.
3. Liability protection
Liability protection covers lawsuits against bodily injury or property damage that you, family members, or pets may cause to others. Such protection covers court costs and any awards you may have to pay in court.
Your policy also includes what’s called no-fault medical insurance. So if a visitor happens to be injured in your home, their medical bills can be paid by your insurance company.
4. Additional living expenses
Let’s say your house burns down and it’s now uninhabitable. While your home is being rebuilt, you’ll need to live elsewhere for a short while. Additional living expenses (ALE) covers any living away from home costs and eases the stress of being temporarily uprooted. These expenses may include lodging, meals at restaurants, storage fees, and other costs incurred while your place is being rebuilt.
And if you rent out part of your home, the amount you would’ve collected on rent while the home is being repaired would also be covered.
There are usually payout limits and time restrictions with ALE coverage. The good news is these caps are typically separate from your policy’s cap on repairing or rebuilding your house.
What won’t homeowners insurance cover?
A standard policy typically doesn’t cover wear and tear, or damage caused by an earthquake or flood. It also won’t cover mold if caused by say, high humidity or a preventable water leak.
Get your home insurance with Jone Family Insurance. Serving Punta Gorda and Fort Myers Florida.