Congratulations! You’re about to become a full-fledged homeowner. Before you let the drawn-out home buying process pass and you begin to bask in the first moments of home ownership, be sure to be on top of the home insurance process.
After putting so much time, effort and money into buying your new home, you’re going to want to be sure your home has the proper coverage it needs.
Of course, you probably are not even sure of the type of varying coverage you need.
While there’s standard insurance for homes, every home and every homeowner has individual exposures that need to be addressed. And while insurance can seem like a thorny process, if viewed as piece by piece coverage, it is easier to understand.
The insurance people sum up six chief forms of coverage so that even a layman can make sense of the information.
The Six Essential Forms of Homeowners Insurance
1. Your dwelling coverage: This coverage protects you from damage to the actual premises of your house. If there is a covered loss – one incurred as a result of events such as fire, storms, theft and/or vandalism – you will be reimbursed up to the limits for repair work or rebuilding. In order to assess your coverage needs in regard to this, you and your insurance specialist can estimate how much it would cost to reconstruct your home. Additionally, if there’s a mortgage on the home, your lender will demand explicit kinds of coverage, as well as specified limits and deductibles.
2. Your other structures: Any detached garage or the like, such as sheds or fences, will be protected under this form of coverage. Coverage is generally up to 10% of the amount of insurance on your home, but you can request broader coverage if you think you need it.
3. Your personal property: This aspect of insurance shields you from damages or losses in regard to your personal things. This includes furniture, sporting goods, computer systems, kitchen appliances and so on. A standard policy will cover the actual cash value, but if you think it’s better to go with replacement cost coverage you can opt for it. Both of these forms of coverage are subject to the limits and deductibles set within the policy.
4. Your loss of use coverage: In the event your home is so damaged from a covered peril that you cannot live in it while under repair or reconstruction, this form of coverage pays for your temporary living costs.
5. Personal Liability: This coverage will protect you from a lawsuit if you or other household members cause an injury to another person or cause damage to another’s property.
6. Medical Payments: This type of coverage will cover the medical costs of those injured on your premises.