A homeowners insurance policy will insure against damage to your home and personal property from a multitude of events such as fire, lightning, burglary, vandalism, storms, explosions and more. Its basic purpose is to restore such items to the condition they were in before a loss occurred. In addition, all homeowner policies contain personal liability coverage which provides protection when you are held legally responsible for bodily injury or property damage to others.
There are essentially six basic coverages included in a homeowners policy.
- Dwelling coverage – This covers your home and any structures attached to it.
- Other structures coverage – Structures which are set apart from your home, but are located on your property for example a detached garage, dock or shed.
- Personal property coverage – Provides coverage for personal property you own.
- Loss of use – Pays for living expenses when you cannot live in your home due to a covered loss.
- Liability coverage – Pays for your legal defense against a liability claim and covers court judgments against you up to the limits within the policy.
- Medical Payments – Includes emergency medical bills for anyone injured on your property or any injury caused by a member of your family or a pet, regardless of where the incident occurs.
In addition to these six basic coverage types, every homeowner should evaluate whether flood insurance is appropriate for their situation.
Flood Insurance - Homeowners insurance policies do not cover damage to your property from flooding. Regardless of location, no home is immune to the possibility of flooding. The National Flood Insurance Program (NFIP) is a federally sponsored insurance program which provides flood insurance coverage with a maximum limit of $250,000 on single family homes, two to four family dwellings and condo units. You may want to consider excess flood insurance which can insure you up to the replacement cost of your property.
In addition to homeowners coverage there are a number of other coverage types specifically for renters and owners of condominiums:
Tenant Coverage - Tenant coverage (also known as renters insurance) provides similar protection as homeowners insurance and is specifically designed for people who lease or rent. It combines personal property coverage, additional living expenses coverage, personal liability coverage and premises medical coverage together in one policy. Tenant insurance does not cover the physical building, that insurance is generally provided by the landlord.
Condominium Coverage - If you are the owner of a unit in a condominium, chances are your association has a master insurance policy to cover common areas including the exterior of buildings and walkways. This policy does not cover your individual and personal interests within your individual unit. You are solely responsible for obtaining that coverage. A condo policy typically covers your personal belongings, along with limited dwelling coverage to insure what is not covered by the master association policy. This policy also provides personal liability coverage, which protects you against bodily injury or property damage to others for which you are legally responsible for.
Contact us today for more information about protecting your home. We are here to answer all of your questions – and to provide the necessary information and guidance for you to make informed decisions about buying insurance.