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Fine Print & FAQs Homeowners Insurance Coverage?
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Fine Print & FAQs Homeowners Insurance Coverage?Daniel Dobbs2025-03-12T10:07:03-07:00
Does anyone read the fine print of an insurance policy? Not many!
From time to time, I find an article that resonates with my readership. The subject is one I know little about, but it is essential to all homeowners.
Your home is likely the largest investment you’ll make in your lifetime, and it’s financially savvy to protect it.
When you purchase a home and take out a mortgage, you must buy a homeowners insurance policy.
It offers financial protection that can help cover the costs of repairing or rebuilding your home if you suffer a covered loss, such as a fire or vandalism.
Homeowners insurance offers you peace of mind that you’ll be able to recover from costly damage. It can lighten the financial burden if the unthinkable were to happen.
This guide walks you through all the important info you need to know about what homeowners insurance covers (and doesn’t)
Table of Contents
What Does Home Insurance Cover?
Homeowners insurance offers protection for your house and its contents, helping you pay for the cost of repairing or replacing your house and belongings in the event of damage.
It also offers liability protection for accidents that happen inside your house.
Like any insurance, a home insurance policy only covers damage that occurred due to a covered loss.
What to Know When Choosing
A Homeowners Insurance Policy
Homeowners’ insurance typically covers losses from the following covered perils: Fire and smoke-Lightning Windstorm-Hail Snow and ice Freezing-
Explosion – Falling objects- Damage from vehicles or aircraft –Theft Vandalism- Accidental water overflow- Riot or civil destruction Volcanic eruption
All home insurance policies have coverage limits and deductibles. Damage is covered by your policy up to your policy’s limits and after you’ve paid your deductible.
Types of Homeowners Insurance
A homeowners insurance policy is like a puzzle; many different pieces of coverage make up the policy. Each component addresses particular perils or parts of your home and comes with limitations on coverage.
Dwelling Coverage
Home insurance protects the physical structure of your house. It helps cover the cost of damage to the building from a covered loss, such as fire or vandalism.
Dwelling protection may also cover any permanent fixtures in your home, such as appliances, and attached structures, such as a garage.
If your home is a total loss, dwelling coverage helps cover the cost of rebuilding it. When choosing a coverage amount, you should get enough indemnity to cover the cost of rebuilding your home at current costs.
A homeowner’s policy may also have other structure coverage. As the name suggests, this protects structures on your property that are not attached to your homes, such as a gazebo, swimming pool or detached garage.
Personal Property Coverage
Personal property coverage protects belongings, including furniture, clothing and more. It may provide restitution to help cover the cost of repairing or replacing damaged or destroyed items in a loss that’s covered by your policy.
Certain electronics or high-value items may need additional endorsements or add-ons for property damage.
Two types of personal property insurance policies exist: actual cash value and replacement cost. The type you have determines how much the policy covers.
An actual cash value policy gives you the current value of your items at the time of the loss, taking depreciation into account.
Replacement cost value policies give more repayment; they pay out the cost of replacing your items with kind and quality items within your policy limits.
Loss of Use Coverage
A home may be uninhabitable due to the destruction of your house. If this happens, you may add additional living expenses for an alternative living situation. That’s where the loss of use provisions come into play.
Loss of use coverage helps pay for your living expenses if you are unable to safely stay in your home after experiencing a loss covered by your homeowners insurance policy. It helps cover the cost while your home is repaired or rebuilt.
Loss of use coverage is also a handy provision of homeowners insurance when the power goes out. If you experience a power outage in your home, this safeguard may kick in to help pay for the loss of food and temporary housing if needed.
As with all coverage options, there are limits and exclusions. You can typically receive reimbursement for temporary housing, moving costs, storage, transportation, certain food costs, and pet boarding.
However, every policy differs, so check yours to see what your loss of use policy includes.
Personal Liability Coverage
Personal liability coverage is an essential part of your homeowners insurance policy that protects you if a house accident results in bodily injury to a guest.
You may think you’d never be sued for an accident in your home, but this coverage is an important component to help pay for the expensive legal consequences of an accident.
If someone is injured, you could be responsible for their medical expenses if you are legally liable for the accident.
Your personal liability insurance coverage helps cover those medical bills. Your personal liability coverage may also cover dog bites on your property.
If you have a dog, you need liability protection around your dog. Some home insurance companies have a blacklist of breeds that they won’t insure.
In addition to medical expenses, personal liability safeguards other costs associated with an accident such as lost wages, pain and suffering, death benefits if the accident is fatal, and legal fees if you need a lawyer.
Something that some people don’t often think about is homeowners insurance when selling a house. Your home insurance covers any mishap during this stage of your homeownership.
What does homeowners insurance not cover?
Unfortunately, many catastrophes and items aren’t covered under a standard homeowners insurance policy.
The good news is that you can purchase additional coverage to receive protection for certain excluded losses.
In general, homeowners insurance typically won’t cover damage caused by your negligence or lack of maintenance.
This means that if you neglect to address a problem in your home and it eventually causes severe harm, you may not be covered.
Flooding and Water Damage
One of the considerable perils that homeowners insurance doesn’t cover is certain water damage. A standard homeowners insurance policy doesn’t cover flood damage.
To receive coverage for flooding, you need a separate flood insurance policy through the National Flood Insurance Program or a private insurer.
In addition to flooding, homeowners insurance typically doesn’t cover disturbances incurred from other natural disasters, such as earthquakes (for which separate policies are also available) and landslides.
Another disturbance not covered by basic homeowners insurance is water backup if wastewater reverses back into your home from an outside sewer system.
Your homeowners insurance policy may cover water damage if the destruction occurred because of a sudden accident. This could be harm from a burst pipe or washing machine hose breakage.
You may also be covered for water damage from vandalism or extinguishing a fire. Mold is another tricky scenario because whether you’re covered will depend heavily on the cause of the problem.
Mold damage is usually not covered, mainly if it results from a lack of maintenance.
High-Value Items
Regarding personal property, standard homeowners insurance won’t cover certain high-value items or collectibles unless you have additional endorsements.
Homeowner insurance doesn’t cover your business property if you have a home-based business. The same goes for any business liability issues.
Other common exclusions from standard home coverage include pest destruction, rot, general wear and tear, and I.D. protection.
A homeowners insurance policy won’t be effective if you rent your house out to other people.
You would need landlord insurance to cover the building and liability of your rental property, and tenants would need renters insurance to cover their belongings.
What to Know When Choosing
A Homeowners Insurance Policy
When buying homeowners insurance, it’s important to ensure adequate coverage and know how to choose home insurance.
If you suffer a loss in your home and need to file a homeowners insurance claim, you don’t want to discover that all your repairs won’t be covered because you don’t have enough coverage.
For dwelling coverage, ensure you have enough coverage to rebuild your home.
For personal property coverage, ensure you have the appropriate amount of coverage so you can comfortably afford to replace all your belongings.
When determining personal property coverage limits, create a home inventory to determine the value of all your belongings.
An insurance agent may be able to help you determine how much coverage you need. Another thing to consider when buying home insurance is to shop around.
Getting homeowners insurance quotes from multiple companies before purchasing a policy will allow you to compare coverage options and prices to find the best homeowners insurance.
All companies offer various homeowners insurance discounts so make sure to ask if you qualify for any when you receive your home insurance quote.
Homeowners Insurance Coverage FAQs
Does homeowners insurance cover theft?
Homeowners insurance typically covers loss from theft of belongings under your personal property coverage. If someone breaks into your house and steals personal items, homeowners insurance will help pay for replacing them.
Your homeowners insurance may also help cover theft of items when away from your home.
For example, if you are on vacation and someone steals items from your car or hotel room, your personal property coverage will likely cover that as well.
In addition to personal property, homeowners insurance covers any damage to your home’s structure caused by a burglar. For example, if an intruder kicks down your door, your dwelling coverage will kick in for replacement or repair.
However, home insurance does not cover theft damage to your car. That’s covered by your auto insurance, assuming you carry comprehensive coverage that covers theft, vandalism, and the like.
If you experience a theft, report it to the police and then file a homeowners insurance claim for the loss. Your theft insurance coverage is subject to your coverage limits and deductible.
Summary of What Homeowners Insurance Covers
Homeowners insurance covers damage or destruction to your home and personal belongings. A standard homeowners insurance policy includes dwelling coverage, personal property coverage, loss of use coverage, and personal liability coverage.
Home insurance only covers damage caused by a covered peril.
Some standard covered perils are theft, fire, vandalism, falling objects and windstorms. Homeowners insurance won’t cover harm caused by your negligence or lack of maintenance.
You may need specific add-on coverage options for high-value items that require additional protection. Standard homeowners insurance may not cover water damage unless the damage was sudden and accidental.
When choosing a homeowners insurance policy, purchase enough dwelling coverage to rebuild your home and enough personal property coverage to replace all of your personal items.
The term “hazard insurance” may describe your dwelling protection that covers the home’s structure from natural disasters and other hazards.
Copywrite © August, 2018 Daniel Dobbs MHM Mortgage /// All rights reserved. No part of this publication may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of the publisher, except in the case of brief quotations embodied in critical reviews and certain other noncommercial uses permitted by copyright law. For permission requests, write to the publisher, addressed “Attention: Daniel Dobbs, Author- VP-Broker Mutual Home Mortgage 265 S. Randolph #120 Brea, Ca. 92821 Cell: 949 250-3981 Dandobbs6@gmail.com NMLS #307631 BRE #00986886
Does anyone read the fine print of an insurance policy? Not many!