A homeowner policy is designed to protect your home against natural disasters or man-made catastrophes. This policy covers your liability expenses in the event that someone gets injured at your house or property, and then sues for damages.
What is covered?
Home insurance policies usually cover both the structure and the personal property of the homeowner, but certain homeowners may require additional coverage for specific perils. If you live in an area prone to earthquakes or floods, for example, it may be worth getting a separate policy.
Coverage for HO-1: Residential Structures
This type of insurance covers the house and any other structures that are on the property such as the garage, shed, or fence. It will typically pay for the replacement cost of your home and its belongings, up to the limits set by your insurer. This insurance covers many other perils including fire, smoke, wind, ice, hail, lighting, vandalism, and theft.
The HO-2 coverage: Personal Liability and Other Contents
This type policy is more extensive than HO-1. You can get coverage for items like jewelry, fine arts and electronics that could be lost during an incident covered under your standard homeowners insurance. Several policies include coverage for liability in the event of slip and falls, dog bites, or other incidents.
Replacement Cost Dwellings Coverage
This option is recommended for most homeowners, since it pays to rebuild your home and its contents, up to a certain percentage of the actual cash value (ACV) of the damaged items. It is usually more expensive than a cash-value policy, but can pay to restore your home to the same condition it was in before the loss occurred.
What is the Best Deductible?
The higher your deductible, the lower your annual premiums will be. This is especially beneficial if your home contains many expensive or valuable possessions that would not be easily replaced in the event of an insurance claim.
Selecting the right coverage levels
A basic homeowners policy will usually include both actual cash value (ACV) and replacement cost dwelling coverage, but most companies allow you to upgrade these two options for an extra fee. The majority of homeowners choose replacement cost coverage as they can get reimbursed for the entire amount, less depreciation.
Choosing a Good Insurance Company
While all companies claim to provide excellent customer service many consumers are unhappy with the experience they have with their insurance company. The best way to determine which company is a good fit for you is to ask questions about the insurer's retention rate and consumer satisfaction data.
Does Home Insurance Cover Damages To Other People's Propertys?
Some homeowners policies offer additional coverage to cover damage to the property of others. This could help with temporary living or lodging expenses while a home is being repaired or renovated. This can be an important benefit to families that have lost their homes because of disasters such a hurricanes and fires.