Essential Things You Should Know about Homeowners Insurance Policy
Life is unpredictable – one day you enjoy the sunshine right from your garden, and the next day you find it ruined by reckless motorcycle driver. Luckily, that person didn’t hurt anybody, but the material damage needs to be covered somehow.
People avoid thinking about potential accidents which could occur, but you never know the intentions of the mother nature or random passerby – and that's why you need to think in advance and provide resources which would save your budget in case of damage. So, if you don’t have homeowners insurance yet, this article will show you why you should purchase it, what it covers and what happens if you don’t have one.
What is Homeowners Insurance?Homeowners insurance is a type of coverage that provides you with financial protection in case of theft, vandalism, disaster or some natural catastrophes which affect your home. Unlike car insurance, which is obligatory for all the drivers and car owners in the U.S., homeowners coverage is optional. However, it’s highly recommended to purchase it since it can be a huge money (and home!) saver. What is the difference between hazard insurance and homeowners insurance? This is one of the most asked questions regarding insurances. So, let’s reveal the secret! Hazard insurance is a part of homeowners insurance policy, and it refers to the coverage of the structure of the house caused by "hazards" like fire, hail, damage, theft or vandalism. Also, Hazard insurance can’t be sold separately from the homeowners policy. What does homeowners insurance cost? The price depends on your city, state, insurance company and other factors, but the average price would be about $35 a month for every $100,000 of property value. The homeowners insurance policy usually includes five types of coverages – dwelling coverage, other structures coverage, personal property coverage, loss of use and personal liability coverage. Now, let’s see what each of these plans include.
Dwelling Coverage (Coverage A)Dwelling coverage is a part of the standard homeowners insurance policy, and it kicks in when you need to rebuild or repair the physical damage that affected your property. What does it cover? • Damage caused by wind, hail, lightning or fire – you can't influence the natural disasters, right. That's why dwelling coverage kicks in if some of these accidents damage your property – the policy should cover the full cost of repairment, even in case of a complete loss. • Vandalism – you wake up and see that your window is broken with a stone – unfortunately, those things happen often, and besides damaging physical stuff, they bring a dose of discomfort to your life. All in all, dwelling coverage will compensate for the costs of repairment. • Repairment of damaged construction attached to your house – if your porch, garage or any other structure that is attached to your home is affected by vandalism or mentioned natural disasters, dwelling coverage will pay for the costs of rebuilding.
Other Structures Coverage (Coverage B)One day you see that a tree fell right on your gazebo you’ve just built and decorated in the way you wanted – the damage is enormous, and you’ve already invested a lot of money in the renovation of your favorite outdoor place. How to recompense that now? Unlike Dwelling insurance which covers damages on your house or structures attached to it, Other structures coverage makes sure the parts separated from your house are insured as well. What does it cover? • Half-coverage for replacement or repair – this coverage mostly doesn't provide the amount of money for the complete repairment of the damaged structure – the funds will determine the exact number you'll need to pay out of your pocket. • Shed, garage or any storage room – if you're using any room for storing your home's garden equipment and tools, it would be covered in case of a disaster like a tree falls, fires or winds. • Addition of extra “other structures” coverages to your policy – if you have some luxurious other structures and the coverage doesn’t help a lot, you can consult your insurance agent and find another policy which would include complete replacement or repair of the damaged object. Why do I have to pay for this insurance policy plan if I have no other structures? – That's a very reasonable question. However, even if you don't have structures like sheds or pools, you're not able to remove this part from your policy – maybe there are some other options, and the best would be to consult your insurance agency.
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