Home Insurance Policy – Types Of Coverage

Your home is your valuable asset. You should try to protect it against any damage. Therefore, you should purchase home insurance policy that offers liability and financial protection for your home along with its valuable possessions. It is also referred to as homeowners insurance or hazard insurance.

Types of homeowners insurance coverage

Regardless of whether or not you buy your homeowners insurance from an agent, your policy is divided into 2 parts as described below.

1. Property Protection – Property protection coverage is generally divided into 4 parts, which are discussed in the following lines.

A. Primary structure of your home:

A typical homeowners policy covers your home, its attached structures and the fixtures, such as, plumbing, built-in appliances, heating, electrical wiring and permanently installed air conditioning systems.

B. Detached structures:

The policy also provides coverage to the detached structures of your house, such as, storage sheds, garages, driveways, fences, retaining walls, patios, etc. However, detached structures which are used for business purposes are not covered under personal homeowners insurance policy.

C. Loss of use:

It covers your living expenses that are over and above your usual living expenses if you’re not able to stay at your home for repairing works. You will also get coverage if you’re denied access to your home by government order.

D. Personal possessions:

If you purchase a typical home insurance policy, then it will cover your home as well as your personal possessions that are owned by you and your family. You’ll get insurance coverage for your clothes, jewelry, money, furniture, sports equipment along with your personal items that get stolen or destroyed by fire or other disasters, which are listed in your policy.

2. Liability protection – Liability protection coverage is also divided into 2 parts, which are given below.

A. Medical treatments:

A typical homeowners insurance policy provides coverage to pay the costs of medical treatment if someone accidentally gets injured on your home.

B. Personal liability:

Your hazard insurance policy will cover the lawsuits or claims that may result if you, your family members or your pet cause damage to someone else. However, this policy does not cover business or auto related incidents.

A typical home insurance policy does not cover injuries to animals or damages to aircraft or motor vehicles. You’ll also not get coverage for losses due to earthquakes, floods, power failures or negligence.

It is advisable that you insure 100% of your home’s value so that you get the desired coverage if your house needs repairing or you need to rebuild it. If you don’t insure 100% of your home’s value, then the coverage amount may be insufficient for repairing or replacing the damaged property. It is quite important to determine the value of your home by the cost of replacing the structures as well as its contents. Therefore, buy adequate home insurance so that you get the right coverage when required.