Author: Ryan Patterson
If you're a new homeowner, understanding your homeowners
insurance policy is really important, but sometimes trying
to figure out all of the policy's components - or whether
you need additional coverages such as flood insurance - can
get confusing. Remember that a standard homeowner's
insurance policy includes four essential types of coverage.
They are: coverage for the structure of your home, home
contents insurance, liability protection and any additional
living expenses incurred if you are temporarily unable to
live in your home due to an insured disaster.
Coverage for the structure of your house is the part of
your homeowner's insurance policy that pays to repair your
home if a fire, hurricane, hail, lightning, or any other
disaster listed in your policy damages or destroys your
home. This coverage will not pay for damage caused by a
flood or an earthquake, or routine wear and tear; you must
buy separate policies for flood insurance and earthquake
insurance. And remember, when purchasing coverage for the
structure of your house, it's important to buy enough
coverage to rebuild your home. Most standard policies also
cover structures that are detached from your home, such as
a tool shed, garage or gazebo.
Home contents insurance covers your furniture, clothing and
other personal belongings in case they are stolen or
destroyed by insured disasters. According to Insurance
Information Institute (www.iii.org), many insurers "provide
coverage for 50% to 70% of the amount of insurance you have
on the structure of your home." This means if "you have
$100,000 worth of insurance on the structure of your home,
you would have between $50,000 to $70,000 worth of coverage
for your belongings." To ensure this is enough coverage,
you need to conduct a home inventory.
Your policy also covers your expensive items, like jewelry,
silverware or furs, but there are dollar limits if these
items are stolen. Home contents insurance generally pays
between $1,000 and $2,000 for all jewelry and other
expensive items, but if you're looking to insure expensive
items to their full value, you should purchase a special
personal property endorsement or floater and insure these
items for their appraised values.
Trees, plants and shrubbery are also covered under your
home contents insurance in cases of theft, fire, lightning,
explosions, vandalism, riots or even falling aircrafts.
Liability protection pays for damages or bodily injury
caused to someone else by you, your family members or your
pets. This portion of your policy covers the cost of
defending you in court and any court awards up to your
policy limit. This coverage applies anywhere in the world,
not just in your home. While liability limits generally
start around $100,000, experts recommend that you purchase
at least $300,000 worth of protection. For extra coverage,
you can purchase an umbrella policy or excess liability
policy.
In case you are forced to live away from your home for some
time, due to damage caused by an insured disaster,
additional living expenses are covered by your homeowner's
insurance policy. Expenses such as hotel bills, meals and
other living expenses are covered, although this type of
coverage does vary from company to company.
If you've just purchased a new home, the best way to enjoy
it is by knowing you're covered in case of a disaster!
Purchase a homeowners insurance policy and understand your
home's coverage.
About the Author:
Ryan Patterson is president of US Insurance Online, based
in Austin, TX. He graduated in 2000 from the University of
Texas with a combined business and computer science degree,
and started US Insurance Online in May of 2005 with fellow
entrepreneur Jim Waltrip. Visit
http://www.USInsuranceOnline.
insurance and for free insurance quotes.
