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What Does Homeowners Insurance Actually Cover?

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Wednesday, April 1, 2015

What Does Homeowners Insurance Actually Cover?

You're looking to settle down, and you've got two major concerns: where to buy a home, and how to protect it. You know about homeowners insurance, but you're not sure you want to pay for it. Besides, what can an insurance policy really do to safeguard your home and everything inside it? A lot, actually.

Here's what homeowners insurance covers: theft, accident, acts of war, and "acts of God." Yep, you read that right. When you buy home insurance, you're protected against acts of God. That's pretty powerful coverage.

So, what exactly are these "acts of God"—that your house gets swarmed by locusts or invaded by frogs? It's possible. But we're talking more along the lines of hurricanes, fires, falling trees, wind and ice storms, and even volcanic explosions. Home insurance helps you recover from devastating natural disasters that are completely out of your control.

Want to secure your home from the unknown? Get homeowners insurance today!

Not all insurers use "acts of God" to label the forces of nature that threaten your home. But all insurance policies protect you from them in some way. So, when you're looking at a specific policy, you need the answer to this question: What exactly does it cover?

Here's What Homeowners Insurance Covers

There are eight types of home insurance policies. They're labelled HO1 to HO8. What they have in common (besides unimaginative names) is that they pay for damage to your home. Where they differ is how much of your home they actually protect.

You'll probably go for an HO3 policy. It's the most common type of home insurance that people buy. Here's what it covers:

  • Your actual home structure
  • Other structures on your property, like your pool, garage shed, tool shed, or fence
  • Personal belongings
  • Medical bills, in case someone gets injured on your property
  • Your legal fees, in case that injured someone takes you to court
  • Your living costs, like hotel bills and eating expenses, while your home is being rebuilt or repaired

Get an HO3 policy today, and you'll be shielded from whatever comes your way.

HO3 Includes Hazard And Liability Coverage

When you buy a standard home insurance policy, you're actually insuring three things from damage: your property, and the personal contents and people inside it. That's why an HO3 includes hazard and liability coverage.

Home Hazard Insurance: Covers loss or damage to your property or personal belongings.

Liability Insurance: Covers the cost of injury to people on your property, and the cost of injury or damage away from your home (but caused by people or pets in your household). It also covers legal fees if you get sued for someone's injury in your home.

Need help deciding which policy you want? Start with Insurance Clarity. You'll be put in touch with an expert agent who can help you find the best options in your area!

Here's How You Can Bulk Up Your Insurance Policy

A basic HO3 offers basic coverage. But it doesn't cover everything. Here are the types of added protection you can buy with homeowners insurance:

Renters Insurance (HO4):

If you don't own your home, buy renters insurance instead. It covers what's not included in your landlord's insurance policy, like protection of your personal belongings in case they get lost, stolen, or damaged.

Extra Coverage For Pricey Personal Items:

A typical HO3 only pays about $1,500 for damaged or stolen goods. That's not nearly enough to cover the cost of your most prized possessions. To protect your jewelry, artwork, firearms, and family heirlooms, insure them separately. You'll pay a little more each month, but you'll have enough coverage to completely replace each item in case they get damaged or stolen.

Protection From "Acts Of God" In High-Risk Areas:

Standard home insurance doesn't cover floods or earthquakes. In some very high-risk areas, you might be required to buy a separate policy that does.

Find out if you live in a high-risk area for earthquakes, floods, mudslides, or hurricanes. Then search for a policy that defends your home against nature's nastiest elements.

More Liability Coverage:

A standard policy gets you about $100,000 to $300,000 of liability coverage. But if someone gets hurt in your house, medical bills and legal fees could add up to much more than that. Add more liability coverage to your plan, and you'll secure your most precious assets.

With the right home insurance policy, you protect what's most important to you. Use Insurance Clarity, and get the coverage you need to insure your future!