No matter what stress I may encounter, I know that I'll always find solace and relaxation at home. As a result, I want to protect it every way I can. Ensuring that there's a safety net in case of scenarios like natural disasters or theft is important - so having a homeowners insurance policy is invaluable. Here's an overview of everything you can get out of a standard homeowners insurance plan:
Homeowners insurance allows you to be covered for expenses resulting from damage to your home and its contents - provided said damage or destruction was conclusively caused by circumstances specifically named in your policy.
You make monthly premium payments for the policy to keep it active, and as long as you do, you'll be covered for costs up to the limit specified in the policy you purchased. Insurance.com cites $200,000 as a smart, minimum coverage amount for a house and its contents, alongside $300,000 in liability coverage. Costs also vary widely by state; hurricane-prone Louisiana and tornado-alley states like Kansas have some of the largest regular insurance expenses in terms of average premiums, according to the Insurance Information Institute (III).
The four critical components of coverage
As explained by the Insurance Information Institute (III), a typical homeowners insurance policy encompasses protections spread across four major categories:
- Dwelling insurance: This is in reference to the house itself. Every essential structural aspect of your home, from its foundation to the exterior siding and the roof, is covered within dwelling protections (barring any extraordinary circumstances with your property or insurance provider).
- Personal property protection: Every object belonging to you and your family members falls under this tenet of a standard homeowners insurance plan.
- Liability insurance: Per the III, liability insurance is intended to help you pay for any legal fees or medical expenses that result from someone being injured on your property by you or any member of your family (intentionally or otherwise). It can also be put toward similar expenses stemming from damage you, family members or even pets inflict upon others' property. In the case of medical expenses, these can often be assessed on a no-fault basis. In other words, injured persons would submit a bill to your insurance company rather than expecting you to pay for it directly and then be reimbursed.
- Additional living expenses: In the event you need to stay elsewhere due to catastrophic damage to your home that stems from a loss your policy covers, this tenet of your insurance plan is what saves the day. It can be used to account for hotel bills, long-range travel expenses and other related costs.
No two homeowners insurance policies are exactly alike, as all of them have differences related to the handful of things they don't cover. However, some exceptions are fairly common: Policies rarely account for property damage caused by flooding or earthquakes. However, many of the most well-known insurance companies sell separate flood and earthquake insurance. Damage to the house that comes from wear and tear isn't covered either.
Extraordinary events will also likely go uncovered, but a solid policy will protect you from most of the worst-case scenarios you can imagine. On top of that, many insurers offer addendums for specific needs, like extra coverage for rare jewelry or rebates for "green" home repairs.
There are also options for additional repair plans (that aren’t insurance), but can help alleviate the stress of dealing with unexpected home repairs. That’s why having a home warranty plan in place can be a good idea as well.
So being prepared for worst-case scenarios is always a good strategy. See how home warranty plans and home repair plans from HomeServe can help with the costs of covered repairs due to normal wear and tear.