Homeowners Insurance: What’s Covered (And What’s Not)
Homeowners Insurance: What’s Covered (And What’s Not)
Peace of mind is priceless, especially when it comes to your most valuable asset: your home. Homeowners insurance provides financial protection against a variety of risks, but it’s important to understand what’s covered and what’s not.
Here’s a breakdown of the key things you need to know about homeowners insurance coverage:
What’s Typically Covered:
* Dwelling: This covers the physical structure of your home, including the foundation, walls, roof, and attached structures like garages and sheds.
* Personal belongings: This covers your furniture, clothing, electronics, and other belongings inside your home.
* Additional living expenses: If your home becomes uninhabitable due to a covered event, this coverage helps pay for temporary housing and other living expenses.
* Personal liability: This covers legal costs if someone is injured on your property or if you accidentally damage someone else’s property.
* Medical payments: This coverage pays for medical expenses incurred by someone who is injured on your property, regardless of fault.
What’s Typically Not Covered:
* Floods: Flood damage is typically excluded from standard homeowners insurance policies. You can purchase separate flood insurance if you live in a high-risk area.
* Earthquakes: Earthquake damage is also typically excluded from standard homeowners insurance policies. You can purchase separate earthquake insurance if you live in an area prone to earthquakes.
* War and nuclear accidents: These events are typically not covered by homeowners insurance.
* Intentional damage: Damage caused by you or a member of your household is not covered.
* Wear and tear: Homeowners insurance does not cover damage caused by normal wear and tear.
Additional Factors to Consider:
* Deductible: This is the amount you pay out-of-pocket before your insurance coverage kicks in. A higher deductible will generally result in lower premiums.
* Replacement cost vs. actual cash value: Replacement cost coverage will pay to replace your belongings with new ones, while actual cash value coverage will only pay the depreciated value of your belongings.
* Endorsements: You can purchase additional coverage for specific risks, such as jewelry, fine art, or identity theft.
It’s important to review your homeowners insurance policy carefully to make sure you understand what’s covered and what’s not. Don’t hesitate to contact your insurance agent if you have any questions.
Here are some additional resources that you may find helpful:
* National Association of Insurance Commissioners: https://www.naic.org/cipr_topics/topic_homeowners_insurance.htm
* Insurance Information Institute: https://www.iii.org/article/standard-homeowners-insurance-policy
By understanding your homeowners insurance coverage, you can be better prepared to protect your home and your belongings in the event of a loss.