If you own your home, you must have homeowners insurance to keep your home and your belongings protected.
So, what does homeowners insurance cover, and how will you know what to expect when disaster strikes?
This helpful guide will explain the nuances of this type of insurance and what’s covered so you can have peace of mind.
Dwelling Coverage aka Your Home’s Structure
In the event of a serious disaster or another emergency, homeowner’s insurance will cover most damage incurred to the structure. This can include items like roofs, flooring, and even plumbing or appliances.
Everything from a fire to a hurricane should be covered, but flood insurance is not part of this policy. If you live in a high-risk flood zone, most of the time you’ll turn to the special flood insurance offered through the federal government in order to be protected. Regardless of what “Flood Zone” you live in, we suggest researching whether or not you need flood insurance.
When you contact the insurance company to file an insurance claim, they’ll send an adjuster to your house. Their job is to document the damage, take clear photographs, and then come up with an estimated cost for repair.
Insurance companies have recently moved away from “recommending” contractors for your repairs, but your local insurance agent generally is a good resource to turn to for help finding a contractor. Once you decide on a contractor, make sure their estimate comes in at or below the amount of the insurance company’s estimate. Otherwise, you will have to let the adjuster know so that he or she can look into the discrepancies.
If you become displaced due to structural damage, your insurance company should pay for you to stay in a hotel or a short-term apartment. Some policies also include a per diem, which can help you pay for things like gas and food. Most “standard” homeowners insurance forms show this coverage as “Loss Of Use”.
The goal of filing your homeowners claim is to get your house back to its original, safe state. Depending on the severity of the problem, this can take a few days to a few months.
Aside from things like fire, smoke, and water, dwelling insurance also covers things like vandalism. Make sure you read your policy carefully to determine exactly which scenarios apply to you.
What Does Homeowners Insurance Cover for Personal Property?
If your home is damaged, it’s likely that many of your personal belongings are damaged, too. Homeowners insurance covers large items like furniture all the way to small items like decorative objects.
Take a look at your policy to find out what your limits are. These limits will give you the maximum total allowable payout for your items.
Some examples of things that are covered include clothing, electronics, furniture, and LIMITED jewelry. When it comes to “special items” like jewelry, furs, high-end collectibles, or other costly items, we suggest taking an inventory of these items (including descriptions & value estimates) and discussing your coverage options with your insurance advisor. Simply tell your agent that you might need to “Schedule” some of your belongings.
Talk to your insurance agent to find out exactly what’s covered under your plan. In most cases, these items will be replaced if they are damaged as a result of a disaster or if they are stolen.
If your furniture gets wet due to a busted pipe, for example, the homeowner’s insurance will cover the cost to replace it. Keep in mind that they typically use the current market value of each item.
It’s important to note that lost items are not usually covered. For example, if you go on vacation and leave something behind, that’s not something your policy will take care of (in most cases).
On the other hand, if your home is broken into and your TV is stolen, the homeowner’s insurance will pay to replace it. Always make sure you file a police report and keep a record of what’s missing.
You should also document everything you own and include serial numbers. Keep your receipts, as this will make replacing your belongings much easier. We know this may be daunting, so if nothing else, take a video of each room in your house (use your cell phone) to show the belongings!
Personal Liability Protection
When you ask what does homeowners insurance cover, you probably aren’t thinking about this aspect of the policy. But liability is an extremely important part of your policy that can protect you in the event of a possible lawsuit.
Let’s say someone were to fall down and hurt themselves anywhere on your property, that person could file a lawsuit against you for damages (medical bills, loss of wages, etc). If someone trips, falls down the stairs or otherwise gets injured anywhere on the property, you should be covered.
This clause in your policy will be much less expensive than if you were to take on a court case on your own. The legal fees alone could be financially devastating, which is why liability coverage is a necessity.
If you’re away from home and cause some kind of damage to a hotel, the insurance policy may cover this as well. Of course, intentional damage or injury to others will not be covered.
Read your terms, conditions, and limits carefully to determine if you have enough coverage. Your agent can help you decide which limits will work best for your situation.
Knowing You’re Covered
When you wonder what does homeowners insurance cover, it’s important to understand exactly what you’re getting. Talk to your agent and ask any questions so you can have peace of mind and know that you’ll get things replaced and repaired as needed.
Contact us today for a quote, and visit our website for more helpful information about insurance.