What is Covered by a Home Insurance Policy

For most of us the roof over our heads is the biggest single purchase we will ever make. Protecting that dwelling is absolutely essential, and no homeowner can afford to be without a home insurance policy. Home insurance is designed to protect the dwelling against loss and provide the funds needed to repair or replace the home in case of damage or loss.

It is important for homeowners to understand just what is and is not covered by such a policy, and to compare various coverage offers very carefully. For instance, some home insurance policies will provide a fixed amount of money if the home is declared a total loss. If the cost of replacing the home has gone up since the policy was written, the homeowner may find himself or herself short of funds. It may be worth the extra premium costs to take out a policy that guarantees the replacement cost of the dwelling – not just its assessed value.

A basic home insurance policy will pay the insured if the home suffers damage as a result of a fire, tornado, hurricane or severe storms. The policy should cover not only the dwelling itself but the possessions inside, and it is important for applicants to read the fine print carefully and make sure this coverage is in place. Homeowners whose homes contain items of extraordinary value, like expensive artwork or antiques, may need to add a rider to their policies to ensure those items are covered for full value.

If the property contains additional buildings like sheds, garages and other permanent structures the homeowner may want to look at adding dwelling insurance. This type of coverage is designed to protect those structures against loss by fire, storms and other natural hazards.

Loss of use coverage is another important part of a home insurance policy, and it is a good idea for policyholders to check their paperwork for this type of coverage. Loss of sue coverage is designed to pay for the family’s living expenses when the home is deemed unfit to live in. This type of coverage can be used to pay for hotel bills and other applicable expenses.

Liability coverage is also an important aspect of home insurance, and it is important for homeowners to be fully protected in this area. The liability portion of a home insurance policy provides protection for the homeowner in the event a person is injured while on the property. This includes common accidents like falls, as well as common occurrences like dog bites. It is important for every homeowner to assess his or her level of risk and choose a liability coverage that is appropriate to those needs. Homeowners who feel they need additional coverage may be able to purchase a special umbrella policy, which can provide coverage into the multiple millions of dollars.

Of course every insurance policy has its exclusions and limitations, and it is important for policyholders and applicants to inquire about what is not covered as well as what is covered. For instance, most homeowners insurance will not pay for flood damage unless additional flood insurance is purchased. Flood insurance can be a valuable investment in parts of the country prone to flooding, and it is important for affected homeowners to inquire about any additional coverage they may need.