Table of Contents
- What Are Netting Escrows & How Does It Work?: The Best Guide - January 2, 2024
- The Secret About Prescriptive Easement: Top Guide 1 Must Know - December 4, 2023
- About Home Equity Loans In Texas And How Can One Obtain It - November 27, 2023
About Homeowners Insurance
A homeowner’s insurance is what protects you and your home in case of any damage or theft.
Practically every mortgage company requires the borrowers to have homeowner’s insurance for the full value of the property before they can sanction a loan or fund a house transaction.
Thus, a homeowner’s insurance is a necessity rather than a luxury, and before we get into the details of what does homeowners insurance not cover, let us quickly have a look at some things homeowners insurance does cover.
What does Homeowners Insurance Cover
Damage to the house
Your insurer will pay for the damages to your house in the event of hurricanes, lightning, fire, vandalism, or other covered disasters.
Furniture, clothing, appliances, and the majority of the other contents of your home are included in the insurance.
You may also get ‘off-premises coverage and file an application for your lost jewelry, no matter where you lost it.
However, there may be a limit to the amount that your insurer will compensate you. Based on the data, a majority of insurance companies provide coverage for 50%-70% of the total amount of insurance you have on the property or home.
Personal liability for injuries
Liability coverage is what protects you from charges filed against you by others and also includes your pets.
For instance, if your pet was to bite someone, no matter if this happens at your place or that person’s, your insurer will cover her medical expenses.
Or, if your child breaks a neighbor’s vase, you can file a claim to compensate him/her.
House or Hotel rents, while your home is rebuilding
The chances of it happening may be slim, but if you ever find yourself in a situation where you have to leave your home for some time, this will be one of the best insurances you ever purchase.
This part of the insurance, also known as additional living expenses, will compensate you for the hotel room, rent, restaurant bills, and other such costs that you incur while waiting for your home to be liveable again.
However, these policies have strict daily as well as total limits, which you can extend if you are willing to pay more coverage.
What Does Homeowners Insurance Not Cover
1 - Floods
Quite often homeowners think that their regular insurance covers them in the event of a flood, and they are shocked to find out that is not the case and they need to have separate insurance for it
2 - Construction damage
Standard insurance will not cover the damage made to your house if you are renovating your house.
Make sure to ask your insurance provider about a separate policy to cover such damages. Also, make sure the contractor you hire is licensed for any kind of liability.
3 - Earthquakes
A standard insurance policy does not cover the house in the event of an earthquake.
4 - Pool accidents
Pools are considered to be an ‘attractive nuisance’ as a very high number of fatal pool accidents or drownings take place in residential pools.
Although your current policy may cover the pool, you may have to check the details to make sure you are covered for the right amount and will probably need to purchase extra liability insurance.
5 - Termite infestation
Damage due to termite infestation is not covered by standard policies and reports suggest that total damage of $5 billion is caused by termites every year in the U.S.
The best to avoid this problem is to hire a licensed pest control company or service and have your home inspected.
6 - Trampoline accidents
You will most probably need separate insurance to cover it as trampolines are considered to be very risky
7 - Jewelry or fine art
Most of the standard policies usually have a limit on how much they can cover, in case something was to happen to your jewelry or other expensive and valuable collectibles.
Getting a separate insurance rider specifying these items exactly is the best way to ensure such items.
8 - Destroyed or stolen cash
It is usually very difficult to convince the insurance company that you had thousands of dollars in cash, and you had stashed that away in the home after it has been destroyed.
9 - Sewer backup
A sewer backing up into your home can cause some serious damage to the walls, floor, furniture, and electric appliances. However, these damages are not covered by standard insurance.
Conclusion
A homeowner’s insurance is very important and is a necessity for homeowners in general terms.
It covers the homeowners from many types of damages. However, there are also many costs and damages that the standard homeowner’s insurance does not cover.
Thus, you need to go through the terms of insurance very thoroughly and check if you need to get any type of separate insurance for some things that the current insurance does not cover for you.
