Typical Home Owner Insurance Coverage Details

If you have decided to insure your home, it is quite natural for you to have the quest lingering in your mind that what does your insurance policy actually covers? It is always good for you to know the nature of the policy before going for it. The article comes as the key for all your questions related to home owner insurance coverage. Simply read on.This article covers

• The importance of access to information on insurance coverage
• The information on various coverages
• The issues that are not covered and exceptions

If you own or live in a home, it is crucial that you understand your home owner insurance coverage. Understanding your home insurance coverage can help you avoid unpleasant problems. After all, you don't want to make a claim, only to find that your homeowner insurance coverage does not cover your claim - leaving you to pay for costs out of your own pocket. The best way to find the answer to the question what does my home insurance cover? is to read your insurance policy and then speak to your insurance company - they will be happy to tell you about your homeowners insurance coverage and will be able to answer any questions you have. Some of the details are as follows:

Structural Coverage

Most insurance policies insure the structure of your house against insured perils. This means that your home is insured against theft, fire, accidental damage, and other types of damage. In general, you'll want to have enough coverage so that you can afford to rebuild your home in case it is destroyed. Your insurance agent will be able to tell you how much coverage you need in order to build your home again to the same standard. It is important that you understand whether there's any type of damage or destruction that is not covered. For example, you may wish to know whether acts of God such as strikes of lightning or environmental disasters are counted on your insurance policy.

Liability Coverage

If someone is injured or killed on your property, or indeed any accident causes problems for someone on your property, liability coverage can help you pay for legal expenses, medical costs, and other damages that the injured party may claim. Many insurance policies offer $100,000 in liability coverage to begin with. However, many people suggest that you raise this liability coverage to $300,000, $500,000 or even more. This is because legal costs and medical costs are so high today that just one accident can easily max out your liability coverage. If you're worried about lawsuits, you may also wish to look at personal umbrella coverage insurance. This type of insurance is general, and it can help you pay for costs beyond your general insurance maximum, in case your regular car or homeowner insurance is exhausted. For example, if someone sues you for $200,000, but your home insurance policy offers only $100,000 liability, umbrella coverage will pay the remaining $100,000 -- so that you don't have to pay the damages from your pocket. This type of insurance is very expensive but can save you a lot of money.

Protecting Your Personal Belongings with Personal Property Coverage

Just as you will want to protect the actual structure of your home, you'll also want to protect what is inside your home. For many people computers, stereo equipment, clothes, art works, and so forth -- can be just as expensive if not more so than the outer structure of the house. Coverage on your personal belongings can help protect you in case of theft or damage. There are three ways to do this:

Actual Cash Value Coverage

In this type of coverage, if your personal property is lost, damaged, or stolen, the insurance company will pay you for replacements of the property, deducting the amount that the property has depreciated since you purchased it. For example, if you have a computer in your house that was worth $5,000 when you purchased it, but is now three years old and so worth only $1000, your insurance company would pay you only $1000 if your computer was damaged or stolen.

Replacement Cost Coverage

In this type of coverage, if your personal property is stolen, damaged, or otherwise lost to fire or other covered problems; you receive today's value for that item. That means that if you paid $5,000 for your computer three years ago, then you are reimbursed for the cost of a similar model today. This type of coverage usually comes with a maximum dollar amount that you cannot exceed.

Guaranteed Replacement Cost Coverage

This type of coverage does not have a maximum amount that you can claim on your personal belongings. That means that you can claim as much as you need in order to replace your belongings fully. This type of coverage is expensive because it offers you the most in case something unfortunate happen to property.

Inflation Protection

Some insurance providers offer you inflation coverage. This is not a specific type of coverage but rather a clause on most policies. It means that your insurance policy will automatically be adjusted with economy inflation. This means that your policy will automatically be updated to account for increasing property costs, market values, and costs of rebuilding. This will help insure that you will be able to afford rebuilding your home in case it is damaged.

Continue to:What Is Not Covered - (They Can Cost You Plenty)