It’s Not Called ‘House’ Owners Insurance
Insurance, as the old saying goes, is something you need but hope you’ll never have to use. Yet with so many types of insurance to choose from, from a myriad of different insurance companies all offering their own discounts, choosing the right coverage for you can be an incredibly daunting task!
At its core, insurance is essentially coverage options that minimize financial damage and come up with replacement alternatives, should a covered loss of an asset or personal resource occur. By paying a small amount into a collective pot, you can cash in or make a claim when the circumstances arise. These payments can be made via a deduction from your paycheck, or by way of a voluntary monthly premium payment to an insurance company. Seems simple so far, but when you start considering just how many assets and resources that you need additional coverage for, it can be very easy to get lost in the plethora of insurance products that are out there.
Home Owners Insurance At a Glance
The terminology is both wide ranging and a tad misleading. There’s auto-insurance, which is also called car insurance, auto policy and vehicle insurance, and that invariably covers a host of other insurance products, such as collision coverage, liability coverage, medical bills coverage, and more. Then there is life insurance, which is there as a safeguard for your family’s finances and estate should something render you incapacitated or worse, deceased. Of course, you should also have medical insurance to cover the cost of healthcare when you need to visit a hospital.
Of all the different types that there are, it’s perhaps home insurance and renters insurance that sound the most innocuous, and yet are actually probably the most useful. This is especially true of home insurance, also known as homeowners insurance.
Your Home
This part of your policy generally pays to repair or rebuild your home if it is damaged or destroyed by fire, hurricane, hail, lightning or other disaster listed in your policy. It generally does not pay for damage caused by a flood, earthquake or just wear and tear. When purchasing coverage for the structure of your home, make sure to buy enough to rebuild your home. Also, review this coverage on an annual basis to make sure you have sufficient coverage.
Your Belongings
Your furniture, clothes and other personal belongings are usually covered if they are stolen or destroyed by fire, hurricane or other insured disaster. Most companies provide coverage between 50% to 70% (every policy is different) of the amount of insurance you have on the structure of your home. The best way to determine if this is sufficient is to conduct a home inventory, in case you need to increase your coverage.
If you have questions about what is covered by a specific policy, contact us.
This part of your policy may also include off-premises coverage, which means that your belongings are covered anywhere in the world, unless you have decided against this coverage.
Expensive items such as jewelry and silverware are covered, but there are usually dollar limits if they are stolen. To insure these special items to their full value, consider purchasing a special personal property endorsement or floater and insure these items for their appraised value.
Trees, plants and shrubs are also covered under standard homeowners insurance. They are protected against theft, fire, lightning, explosion, vandalism, riot and even falling aircraft. They are not covered against damage by wind or disease.
Liability Protection
There are so many unforeseen accidents that can happen in and around your home. Liability protects you against lawsuits for bodily injury or property damage that you or family members cause to someone else. It also pays for damage caused by your pets. So, if your child or man’s not-so best friend accidentally breaks something in your neighbor’s yard, you are covered. The liability portion of your policy also pays for both the cost of defending you in court and any court awards—up to the limit of your policy.
Liability limits generally start at about $100,000. Many recommend that you have up to $300,000 in coverage. Some people feel more comfortable with more coverage. You can also purchase an umbrella or excess liability policy which provides broader coverage, including claims against you for libel and slander, as well as higher liability limits.
Your policy also provides no-fault medical coverage. If a friend or neighbor breaks an ankle playing basketball in your back yard, he or she can simply submit medical bills to your insurance company. Expenses are paid without a liability claim being filed against you. You can generally get $1,000 to $5,000 worth of this coverage.
Living Expenses
If your home is damaged because of a fire, storm or other insured disaster and you can’t live in it, this coverage pays the costs of living somewhere else while your home is repaired or until you find another place to live. While your home is being rebuilt, hotel bills, restaurant meals and other living expenses are covered. Coverage for additional living expenses differs from company to company. Contact us to help you decipher what your plan may cover.
FAQs
Firstly, the name needs to be addressed. Home insurance policies are for homeowners, and don’t just cover houses either — after all, there is a reason they aren’t called house insurance policies. Also known as homeowners insurance policy — again, removing the focus of just being on the building itself — there are multiple types of coverages that fall under the umbrella term. At the end of the day, unless you’re incredibly unlucky, your house, condo, or apartment is hardly likely to grow legs and run away––so homeowner insurance seeks to cover far more than the four walls. As the name loosely suggests, the owners of the home are the insurance carriers.
It is important to have all of the facts when considering what coverage is right for you and your family as homeowners. RightQuote, a Colorado Springs-based independent insurance agency, are very insistent that the people they assist not only have the best coverage for their needs, but that they know exactly what each insurance policy means, has included as standard, and––perhaps most importantly — where the exclusions lie. Let’s take a look at what is covered by homeowner insurance, and why the name might perhaps be understating it’s importance.
The first type of coverage has already been alluded to, but is the most obvious––the house itself. Though your home is more than a house, or other structure that you inhabit, it is the largest asset that you, as homeowners, are likely to ever have. Thus, it is precious and worth a significant amount of money to you and your family. So, to have peace of mind that your dwelling is safe and secure is one thing, but to know that it is covered as a structure is another. No, it may not grow legs and run away, but there are elements that can damage a house, condo, or apartment that need consideration.
It’s no coincidence that RightQuote is based in Colorado Springs, an area that has seen natural disasters aplenty in recent times. Colorado homeowners in particular have unique needs, having had to protect themselves from flooding, wildfires and landslides that are common in the Centennial State. Having the requisite coverage as part of their policy will ensure that homeowners in the State of Colorado are secure in the knowledge that any damage caused by natural disasters can be repaired and paid for by their insurance company. That said, whilst wildfires are covered, a separate flood insurance would be needed for basic coverage against water damage incurred during flooding.
To add to that, your policy should include living expenses coverage for if your home is untenable in the time it takes to repair. From hotel stays to rental properties (if repairs take a long time and you have to become a renter), as well as take-out cuisine and other specific needs, the accrued cost of living outside of the home, whilst not being able to live within it, are covered.
Obviously, damages caused by the elements are not limited to a home’s structure, but will affect personal property, too. Homeowners insurance policies should be covering 50-70% of all of your damaged belongings––including plants and flowers if you have them––and even if they are off-premises. Do be aware that there might be a coverage limit on the more expensive and precious items, so consider getting a safety deposit box for them, and compile an inventory list of everything else.
Incidentally, a neighbor’s belongings or personal health is covered by liability insurance should you or a family member cause unintentional harm to them or their personal property.
So when you are putting your personal information out there on the hunt for great home insurance rates, to just check where your deductibles are going, look past the discounts and optional coverages and make sure they have these main four: house, personal property, living expenses, and liability.