Homeowner insurance coverage is a policy that protects your home from damage caused by natural and man-made disasters. It also covers any liability costs if you are sued by someone who is injured on your property or home.
What's covered by the policy?
Some homeowners need extra protection against specific perils. For example, those living in areas prone to floods or earthquakes might choose separate policies for those events.
HO-1: Coverage of Dwellings and Other Structures
This is the most basic type of homeowners insurance. It covers the home as well as any other structures on your property, such a the garage and shed. It pays for the replacement of the home and its contents. However, the limit is determined by the insurer. The policy also covers other perils such as vandalism, theft, fire, smoke and wind.
Additional Contents and Liability Coverage (HO-2)
This type of insurance is more comprehensive that HO-1. It covers a wider variety of items, including jewelry, fine art, and electronics, which may be damaged or lost as a result of an accident covered by a standard homeowners' policy. Some policies also cover personal liability, such as for slip and fall injuries or dog bites.
Replacement Cost Dwellings Coverage
Most homeowners will choose this option, as it covers the cost of rebuilding your home and its contents up to a certain percent of the ACV (actual cash value) of the damaged goods. This policy is generally more expensive than one that pays cash value, but it will restore your home in the same condition as before the loss.
How to Choose the Right Deductible
The higher the deductible, then the lower your premiums. It is beneficial to have expensive and valuable possessions at home, which are difficult to replace. They would also be subject to depreciation.
Selecting the right coverage levels
A standard homeowners policy usually includes both actual cash values (ACV) as well as replacement cost coverage. But most companies let you upgrade these two options by paying an extra fee. The majority of homeowners choose replacement cost coverage as they can get reimbursed for the entire amount, less depreciation.
Choosing a Good Insurance Company
Even though every company boasts of excellent customer care, many consumers find themselves disappointed by the insurers they choose. It is best to ask the insurer about its customer retention rate as well as consumer satisfaction statistics.
Does Home Insurance Cover Damage to Other People's Property?
Some homeowner policies will include additional coverage for damage to other people's property, which can help you with the costs of temporary lodging or living expenses during a home repair or renovation. This can be an important benefit to families that have lost their homes because of disasters such a hurricanes and fires.