Whether you’ve owned your home for 25 years or you’ve just bought your first house, a refresher in homeowners basics may be a good way to evaluate your current coverage needs and what is the best way to insure your home. Typical home insurance policies usually cover at least 5 types of essential coverage.
Dwelling coverage is the part of a policy that covers your home and its attached structures such as a garage. Dwelling coverage pays to repair or rebuild a home in the event of a “covered peril” claim. Covered peril claims include things like fires, hurricanes hail, lightning, and windstorms. Standard homeowner’s policies will not cover flooding or poor maintenance. Flood coverage is provided by a federal government program and maintenance issues are the homeowner’s responsibility.
Separate structures (or other property) coverage covers property that is not attached to your home such as a fence or a shed.
Personal property coverage will cover your personal belongings such as furniture, unattached appliances, clothing, and electronics if they are stolen or destroyed by a “covered peril.” You can choose to have these items covered either by reimbursement for replacement value or actual cash value. Reimbursement value, the more expensive option will pay you the full amount to replace the items, while actual cash value will pay out the amount that those items are worth now after depreciation. This part of the policy will even cover items off-premise, up to a certain limit, which means the items are protected anywhere in the world.
Liability protection covers legal fees and a legal settlement if visitors are injured or their property is damaged by a policyholder or their family. This coverage is not limited to in the home, but anywhere in the world as well. Liability limits generally begin at $100,000 although $500,000 is recommended. An umbrella or excess liability policy provides additional coverage in this area.
Additional living expenses pay for the additional costs you might accrue if your house is damaged and you need to live somewhere while it is being repaired. This may include hotel fees and your meals while you are displaced.
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AZ Insurance Team
*All policies are a little different and this may not be applicable to your insurance policy, talk to your agent to see what your policy covers.*