Every new homeowner knows the feeling of joy when they finally find the house they want at the price they can afford. It's exciting when you get to the closing day, and you move into your new home.
Maybe your move was an upgrade to a larger home or perhaps you moved to an entirely new area. No matter what type of house you get, you need homeowner’s insurance to protect what is probably your single most significant investment.
Many people have an agent handle their homeowner’s insurance policy, but they don’t know how their policy coverage works. Most people don’t take the time to read all the small print of the policy, and even if they did, it might not make sense to them. However, if something goes wrong and your house gets damaged, you will want to know just how your coverage works.
When homeowner’s purchase a policy for their home, they can customize the coverage to fit their particular needs and budget. You select the policy and deductible amounts, but the main coverage areas will be similar for all homeowners.
What is covered?
All homeowner’s policies come with three basic protections. Also, if you live in a flood zone or an active earthquake area, you can add coverage for these situations. Several add-ons will help you customize your insurance package. That’s why it’s best to discuss the fine details with your agent. The main insurance areas of insurance coverage include:
The structure of your house refers to the house itself and all the components that go into making it. That consists of the walls, floors, beams, roof shingles, windows, cabinets, and so on. Your structures also include your garage and any other buildings if you have one. For example, if you have a shed, poll building, or even a playhouse on the property, those are your structures, too.
What type of damage is covered by a homeowner’s policy?
A general policy covers many situations like the following:
- Damage from natural forces such as lightning striking a tree and it falls on the house, or a mini tornado blows some of the shingles off.
- Damage caused by a fire
- Water damage caused by a sudden and unexpected accident such as a pipe bursting
- Theft and burglary
- You may want additional coverage for things like flooding, not typically covered through an ordinary homeowner’s policy. You can also add a provision for “loss of use,” which pays all or part of your motel costs if you need to move out of your house while it’s being repaired.
Your personal belongings will be covered in the event they are damaged or stolen. However, it would be best if you documented what personal belongings you own with your insurance company. You can do this by making a list of some photos. Review your list yearly to determine if you need to make any updates.
You are probably all too familiar with the “slip and fall” stories, but could they occur in your home and if so, what would happen? This is where liability insurance, which is included in your homeowner's policy, comes into play. Liability coverage will help homeowners if someone gets injured while visiting their property.
What About Home-Based Businesses?
People who operate a business out of their home sometimes mistakenly think that their homeowner's policy will cover their business. However, home-based businesses need a separate business policy. The homeowner's policy usually is not adequate to cover business equipment in the event of an accident. The extent of the equipment you own depends on your business. Some home-based companies have equipment that will far exceed your policy amount. You need to make sure you have business coverage for protection.
The liability on your homeowner's policy won't be sufficient if you have a customer gets injured at your home. Depending on what type of business you have, you may need product liability, as well. This protects you if someone sues because of an issue or defect with your product.
Meet with your insurance agent to work out the plans of your policy and discuss the exact amount of coverage you will need. In the meantime, if you're still looking for that dream home, get in touch with Mark Z Real Estate Experts today.