Byline: Malana VanTyler
When you were planning to buy your home, every blog post you read, each podcast you listened to, and every expert you consulted told you not to forget about home insurance. But do you even know what it covers?
Being unaware of such a critical matter could result in costly surprises later. What will happen if a tree crashes through your living room window during a storm? Who will cover your expenses when you have to stay at a nearby hotel while renovating your home?
The key is to understand the contents of your insurance policy. Let’s look at what standard home insurance typically covers:
What Is Home Insurance Coverage
Homeowners insurance consists of different types of coverage that can help repair your home or replace your personal belongings in case of damage. But for the policy to take effect, the damage has to be caused by the covered peril.
When looking for an insurance provider, assess your needs and compare quotes. Ask if they provide comprehensive coverage or if you’ll need to get separate insurance policies for other items. This research will help you choose a home insurance coverage that fits your budget and protects your home from disasters.
What Does Home Insurance Cover?
Each plan provides protection against different perils. Here’s a general idea of the types of coverage included in a standard home insurance policy and what they protect:
Dwelling Coverage
Dwelling protection covers your home’s structure. This includes the roof, walls, windows, and floors. If your home has built-in appliances, an attached garage, deck, or porch, the dwelling policy also covers them.
This policy protects your home from covered risks like fire, windstorms, hail, lightning, and vandalism. But there are some exclusions. It doesn’t cover damage from normal wear and tear, floods, or earthquakes.
Other Structures Protection
Your home insurance can also include other structures protection policy. This covers properties that are not attached to your home. This could be a detached garage, shed, gazebo, or fence.
The covered risks in this plan are the same as those in your dwelling coverage, but the amount is usually less. So, if you have expensive structures, such as a pool house, you should consider increasing your coverage limit.
Personal Property Protection
You also want your personal belongings, such as furniture, clothes, and electronics, to be safe. Personal property protection covers these items if they’re stolen, damaged, or destroyed.
It can also cover items outside the house, such as bikes or tools, but minus your deductibles. For expensive items like jewellery, fur, and art, consider purchasing an additional policy to cover their market value.
Additional Living Expenses
So, where do you stay as you renovate your home because of that storm that crashed your roof? Well, additional living expenses (ALE) or loss of use coverage can help pay for hotel rooms, meals, and other costs of living somewhere else when your home is unhabitable because of a covered risk.
And what if you rent out a section of your house? No worries! ALE covers those too. Just make sure you read your plan carefully, as some policies include a time limitation for how long you can enjoy these benefits.
Liability Protection
Your home insurance plan should also cover bodily injury liabilities and accidental property damage to others. Say, for example, a neighbor trips and falls on your property, you’ll be legally liable for any injury they get. What if you were playing catch with your child and accidentally broke your neighbor’s window?
Liability protection covers these events, so you won’t have to pay out of pocket. However, it doesn’t cover your criminal activities or intentional damage. It also doesn’t pay for injuries due to a car accident.
Medical Payments Coverage
This plan is almost similar to limited liability insurance. It covers medical bills for anyone injured on your property or by a pet or family member. The best part? You don’t have to be at fault legally for this policy to work. It kicks in automatically when someone gets hurt on your property.
But remember, medical payments coverage only pays for outsiders. Not you, a family member, or anyone protected under workers’ compensation.
Conclusion
Knowing what’s covered in your home insurance plan may not seem urgent at first, but it comes in handy when disaster strikes. Your best defense against unexpected costs is knowledge. So, don’t wait for an emergency to understand your policy. Review your policy beforehand and don’t be afraid to ask questions. A little research will save you thousands of dollars in out-of-pocket payments in the long run!