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Homeowners Insurance

Homeowners insurance is typically designed to protect a homeowner again certain perils. However, with that said, it is vitally important to understand exactly what you are getting prior to purchasing a homeowner insurance policy. All too often people will purchase this type of policy by simply going with a popular online insurance quote website. There is no specific problem in doing this, although you should know and understand exactly what your home insurance policy covers.

No matter where you purchase homeowners insurance from, whether this be online or via a local agent, your policy will typically be divided into two parts. The first part will usually come with a home insurance property protection, and the second part will cover home insurance liability protection. The first page of your homeowner’s insurance policy will generally have a declarations page. This will break down the first part, property protection, into four subsections. These will usually be – 1) Dwelling 2) Other structures 3) Personal property 4) Loss of use.

  • Dwelling will usually cover your house, the attached structures, and certain fixtures in your house which may include built-in appliances, plumbing, heating, and even permanently installed air conditioning systems.
  • Other structures will generally cover structures such as storage sheds and garages. This will also cover any other fixture that is attached to your land which may include driveways, patios, fences and retaining walls. You should be aware that if the specific structure is used for business purposes it will not be covered under a personal homeowner’s insurance policy.
  • Personal property will typically mean the contents of your home and any other personal items that either you, or your family members who live with you, own. However, personal property will not cover motorised vehicles, although there may be some form of limited coverage for small boats. The main items that are covered under personal property will include artwork, business property, jewellery, money, electronic data and firearms.
  • Loss of use will provide coverage when you are unable to live in your own home whilst repairs are being made. This will typically cover your living expenses, and will be enough to provide alternative accommodation.

There are many additional forms of cover that a homeowner's insurance policy will provide. Some of these include fire department service charges, removal of damaged trees and shrubs, property removal, illegal use of credit cards, glass breakage and collapse of buildings. You are also able to add endorsements to a homeowner's insurance policy and these may include:-

Guaranteed replacement cost coverage will pay for the overall cost to rebuild your home. Extended replacement cost coverage will ensure that the cost of reconstruction your home is covered if the initial budget, and subsequent insurance “pay-out”, is not deemed to be enough. Inflation guard will help to keep your homeowners insurance policy in line with inflation, so you always have adequate cover in place. Secondary residence, as the name implies, will provide protection for your second home. Scheduled personal property will cover certain items that exceed your normal policy limits on your regular homeowner’s insurance policy. These may include jewelery, stamps, coins, antiques, computers, furs and guns. There are also certain endorsements that will cover you for credit card forgery and for theft from your motor vehicle or trailer.

The second part of your homeowner’s insurance policy will provide protection from liability coverage. This is typically broken down into two separate parts that are, 1) Home insurance personal liability and 2) Home insurance medical payments. Personal liability will provide coverage against a lawsuit or claim issued against you. This will mean that if property damage or bodily injury is caused to another person on your property, this will provide coverage for any corresponding legal expenses. You should be aware, however, that any auto or business related incidents will not be covered. Medical payments will ensure that if a person is accidentally injured on your property, their medical expenses will be paid for. You should be aware that the specific type of cover will not apply to you or family members living in the property.

There are also certain exclusions that you should be aware of on your homeowner’s insurance policy. The policy will not generally cover damage to motor vehicles, injuries to animals, aircraft, and parts. In general a basic homeowner’s insurance policy will not cover any losses that have come about due to floods, water damage, mudslides, neglect, earthquakes, dry rocks, vermin, power failures, or any damage that has resulted from war or a nuclear hazard.

With that said, a homeowner's insurance policy is likely to differ from insurance company to insurance company. Certain companies will cover a number of certain perils and exclusions, whereas others will not. Therefore, prior to purchasing a homeowner's insurance policy, it is vitally important that you verify exactly what your specific policy will cover. It is important to make sure that any insurance policy will cover your own individual needs and circumstances.

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