Homeowners Insurance is a property insurance policy that covers losses, damages and liabilities caused by various perils. These perils are called "named perils", in the insurance industry, and include fire, theft and winds. Homeowners insurance pays medical bills, wages lost and other expenses when you are sued because of injuries that happen on your property.
What is included in a house insurance policy?
A homeowners policy usually includes a variety of coverages for your home and any other structures you own, as well as personal items. Liability insurance should be included to cover any court costs in the event of a lawsuit for injury or damage to property.
Homeowners Policies HO-3 offer open-peril coverage.
There are two types of homeowner's insurance: comprehensive (HO-05) and modified form (HO-8). The former provides protection against damage from any peril, whereas the latter only covers named perils. Both offer protection against fires, thefts and other hazards. The latter option, however, is slightly more expensive, but it can help prevent major losses when you have expensive items, such as furs or jewelry.
Many home insurers provide HO-3 policy options.
Purchases can be made on the basis of actual cash value or replacement cost. The insurance company pays for materials of the same quality if you build your home from scratch. This can get expensive if you want to add new rooms or even insulation. An actual cash value policy, on the other hand, is only worth what your home is worth on the market, minus any depreciation.
Liability Coverage
A standard homeowners' policy covers damage to your property. This is especially important for those who have pets or children that play on their lawn. This coverage is usually accompanied by a personal liability limit that will protect you against claims for injuries or other damages that occur on your property.
Loss-of-Use Coverage
A claim for loss of usage will cover hotel expenses and temporary living costs incurred during the rebuilding or repair process. This coverage can vary from policy to policy, but is typically between 20 and 50 percent of the total insurance.
Personal Property Coverage
Many homeowners policies cover your furniture and electronics, as well as other personal items, in the event of a covered accident. Some homeowners policies offer coverage for expensive items such as jewelry, art or furs.
Liability Coverage
This section of the policy will protect you in case someone sues your insurance company for an injury or damage that occurs on your property. This section of your insurance policy covers medical bills and lost wages as well as other expenses incurred by another party due to an injury or damage on your land.
ALE Endorsement
This endorsement may pay to repair or restore your home so that it meets the new building code or ordinance that was in place at the time of construction. The cost of this endorsement is a small extra premium but it's worth the peace-of-mind.