Homeowners Insurance 101 Homeowners Insurance 101
Prepare yourself for any kind of damage to your home or personal belongings by being in the know about your homeowner’s insurance policy. Often a disaster or tragedy will occur with the victim assuming their insurance policy will cover the loss -- but much of the time, the insurance company won't cover that specific damage, leaving homeowners unprotected and without a way to repair their ruined homes. Protect yourself and your family by being aware of the basic insurance policy for your home, as well as any coverage you may need to add, depending on your personal needs and where you live.
What It Covers
The structure of your home is covered by a homeowners policy. If the structure is damaged by most weather from the sky -- hail, hurricane, lighting, rain, snow -- it should be covered by your policy, but be sure to read what your specific policy includes.
Damage due to a fire is included, both for the structure itself and personal items inside the home. Be sure the coverage amounts are enough to replace your home and the items in it, in the case of a total loss.
Basic homeowners policies cover when rough weather, including wind and rain, rolls through and damages the structure of your home. Flood coverage, however, does not fall under this category.
If your personal belongings are destroyed in one of the events mentioned above, homeowners insurance will cover it as well. While items are not typically reimbursed at their full retail value, the insurance will help you get new items.
If you and your family have to live in an alternate location while your home is being repaired, insurance plans will pay to put you up in temporary housing. As with all policies, though, you will want to find out what those limits are so you can budget accordingly.
What It Doesn’t Cover
Surprisingly, homeowners insurance does not cover flooding. Policies that have flood coverage must be purchased separately through the National Flood Insurance Program. Most homeowners policies do cover water damage, however, if a pipe bursts or there is an accident within the home.
If you live in an area that experiences earthquakes on a regular basis, make sure to ask your insurance agent about getting the additional coverage. Most basic policies don’t cover damage from earthquakes.
Wear and Tear
Regular damage caused by age, average weather patterns, and owning a home for a long period of time are not covered under a homeowners insurance policy. Regular maintenance such as painting, plumbing, repairing the roof, and keeping your home in a livable condition are not part of these types of policies.
A few policies include coverage for this, but typically it’s an add-on to a homeowners insurance policy. Sewage backups can occur when there is a lot of rainfall and flooding in the area, but not necessarily in your home. If sewers back up, water and sewage can enter your home, flooding through the backed-up drains and pipes.
What to Look For
For all policies, double-check the dollar amounts of each type of coverage and what kinds of events they cover. All policies have limits, and it’s important that these limits cover your property should it be damaged.
If you live in an area with common patterns of weather that aren’t typically covered by homeowner’s policies, pay the extra for the coverage. Earthquake, flooding, tornado, and hurricane coverage are essential if you live in areas that experience these kinds of weather.