By Derek Gardner

With a standard homeowner’s insurance policy in your hand it includes four important types of coverage. They include: Coverage for the construction of your home, Coverage for your private belongings, Liability security, Additional living costs in the occasion you are for the time being unable to live in your home because of a fire or other insured disaster.

1.The construction of your house

This part of your policy pays to fix or reconstruct your home if it is damaged or shattered by fire, hurricane, hail, lightning or other catastrophe listed in your policy. It will not compensate for damage caused by a flood, earthquake or routine wear and tear. When purchasing coverage for the construction of your home, it is vital to buy enough to reconstruct your home.

Most standard policies also cover structures that are separate from your home such as a garage, tool shed or porch. Generally, these structures are covered for about 10% of the total of insurance you have on the construction of your house. If you need additional coverage, talk to your insurance agent about purchasing extra insurance.

2.Your private belongings

Your furniture, clothes, sports equipment and other private stuff are covered if they are stolen or destroyed by fire, hurricane or other insured catastrophe. Most companies offer coverage for 50% to 70% of the total of insurance you have on the construction of your house. So if you have $100,000 worth of insurance on the construction of your house, you would have between $50,000 to $70,000 worth of coverage for your belongings. The most excellent way to determine if this is enough coverage is to carry out a home inventory.

This element of your policy includes off-premises coverage. This means that your stuff are covered anywhere in the world, except if you have decided against off-premises coverage. Some companies limit the amount to 10% of the total of insurance you have for your belongings. You have up to $500 of coverage for illegal use of your credit cards.

Costly items like jewellery, furs and silverware are covered, but there are more often than not dollar limits if they are stolen. Generally, you are covered for between $1,000 to $2,000 for all of your jewellery and furs. To assure these items to their full worth, purchase an individual property endorsement and cover the item for its appraised price. Coverage includes “accidental disappearance,” meaning coverage if you merely lose that item. And there is no deductible.

3.Liability security

Liability covers you against lawsuits for physical hurt or assets damage that you or family members cause to other people. It furthermore pays for damage caused by your pets. So, if your son, daughter or dog unintentionally ruins your neighbour’s high-priced rug, you are covered. However, if they demolish your rug, you are not covered.

The liability part of your policy pays for equally the cost of defending you in court and any court awards, up to the boundary of your policy. You are also covered not just in your house, but wherever you are in the world.

Liability limits usually start at about $100,000. Though, experts advocate that you purchase at least $300,000 worth of security. Some people feel more secure with even more coverage. You can buy an umbrella or excess liability policy, they provide broader coverage; including claims against you for libel and slander, as well as higher liability limits. In general, umbrella policies cost about $200 to $350 for $1 million of extra liability protection.

Your policy furthermore provides no-fault health coverage. In the event a friend or neighbour is wounded in your home, he or she can simply send medical bills to your insurance company. This way, expenses are compensated without a liability claim being filed against you. You can in general get $1,000 to $5,000 worth of this coverage. It does not, on the other hand, pay the medical bills for your family or your pet.

4.Additional living costs

This pays the added costs of living away from home if you can't live there because of damage from a fire, storm or other insured catastrophe. It covers hotel bills, restaurant meals and other living costs incurred while your home is being rebuilt. Coverage for extra living costs differs from company to company. Many policies offer coverage for about 20% of the insurance on your home. You can add to this coverage, but, for an added premium.

Print-friendly version