home insurance explained
Congratulations! You are about to become a full-fledged homeowner. Before you let go of the lengthy home buying process and start enjoying your first moments of home ownership, make sure you’re up to speed on the home insurance process.
After investing so much time, effort, and money into the purchase of your new home, you’ll want to make sure your home has the proper coverage it needs.
Of course, you’re probably not even sure what type of variable coverage you need.
While there is standard insurance for homes, every home and every homeowner has individual exposures that need to be addressed. And while insurance can seem like a thorny process, if it’s viewed as piece-by-piece coverage, it’s easier to understand.
Insurance People summarizes six main forms of coverage so that even a layman can understand the information.
The Six Essential Forms of Homeowners Insurance
1. Your dwelling coverage: This coverage protects you from damage to the actual fixtures in your home. If there is a covered loss, one that occurs as a result of events such as fire, storm, theft and/or vandalism, you will be reimbursed up to the limits of the repair or reconstruction work. To assess your coverage needs in this regard, you and your insurance specialist can estimate how much it would cost to rebuild your home. Also, if there is a mortgage on the home, your lender will require explicit types of coverage, as well as specific limits and deductibles.
2. Your Other Structures – Any detached or similar garages, such as sheds or fences, will be protected under this form of coverage. Coverage is typically up to 10% of your home insurance amount, but you can apply for more coverage if you think you need it.
3. Your personal property: This aspect of insurance protects you from damage or loss regarding your personal things. This includes furniture, sporting goods, computer systems, kitchen appliances, etc. A standard policy will cover actual cash value, but if you think replacement cost coverage is better, you can opt for it. Both forms of coverage are subject to the limits and deductibles established in the policy.
4. Your Loss of Use Coverage – In the event your home is so damaged by a covered peril that you cannot live in it while it is being repaired or rebuilt, this form of coverage pays for your temporary living costs.
5. Personal Liability – This coverage will protect you from a lawsuit if you or other household members cause injury to someone else or cause damage to someone else’s property.
6. Medical Payments – This type of coverage will cover the medical costs of people injured at your facility.
