Congratulations! You are about to become a full-fledged homeowner. Before you let the long home buying process pass and you start enjoying the first moments of home ownership, make sure you are on top of the home insurance process.
After putting in so much time, effort, and money to purchase your new home, you’ll want to make sure your home has the proper coverage it needs.
Of course, you’re probably not even sure what kind of versatile coverage you need.
While there is standard home insurance, every homeowner and every homeowner has individual exposures that must be addressed. And while insurance may seem like a tricky process, if viewed as coverage piece by piece, it is easy to understand.
Insurance professionals summarize six major forms of coverage so that the average person can understand the information.
The six basic forms of homeowners insurance
1. Your dwelling coverage: This coverage protects you from damages to the actual premises of your home. If there is a covered loss – a loss incurred as a result of events such as fire, storm, theft and/or vandalism – you will be compensated up to the limits of repair or rebuilding work. In order to assess your coverage needs in relation to this, you and your insurance professional can estimate the cost of rebuilding your home. In addition, if there is a home mortgage, the lender will require explicit types of coverage, as well as specific limits and deductibles.
2. Your Other Structures: Any detached garage or the like, such as sheds or fences, would be protected under this type of coverage. Coverage is generally up to 10% of your home insurance amount, but you can request wider coverage if you think you need it.
3. Your personal belongings: This aspect of insurance protects you against damage or loss in connection with your personal belongings. 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 use replacement cost coverage, you can opt for it. Both of these forms of coverage are subject to the limits and deductibles specified in the policy.
4. Loss of Use Coverage: If your home is so badly damaged from a covered peril that you cannot live in it during repair or rebuilding, this type of coverage pays for temporary living costs.
5. Personal Liability: This coverage will protect you from filing a lawsuit if you or other members of your household cause injury to another person or cause damage to another person’s property.
6. Medical Payments: This type of coverage will cover the medical costs of those injured in your home.