The single best way for homeowners to protect their investment in their home is by owning a homeowners insurance policy. Since the vast majority of homeowners also have a mortgage on the home, the lending institutions themselves often require mortgage holders to carry homeowners insurance.
Homeowners Insurance Policies
The insurance industry has been regulated for many years and as a result many of the features found in homeowner’s insurance policies have been standardized. That’s good news for the consumer because it makes comparisons between insurance policy quotes easier.
Insuring the Home Itself
These first four categories of a homeowners policy deal with the insurance coverage provided on the home itself or loss of use of that home. If you read through your existing policy or when comparison shopping insurance quotes, you should be asking yourself these types of questions:
- What are the perils covered by each policy?
- What happens if I cannot stay in my home after it is damaged?
- What insurance is offered on the home’s contents in each policy?
Personal Property Insurance
The personal property portion of a homeowners policy covers the assets or property that is inside the home. Personal property includes furniture, appliances and certain other items – subject to limits. For example, there may be limits on how much you will get paid for money / cash, jewelry, computer equipment and artwork.
If you have valuable collections or special items that go beyond the standard coverage values stated in your homeowners insurance policy, then you will need to get an endorsement or rider to the policy to cover the full value of each item.
Homeowners Liability Insurance
This next broad category of homeowners insurance deals with liability insurance. As a homeowner, we automatically assume some responsibility for what happens in our home and around our property. Homeowners liability insurance provides the policyholder with protection in the event someone gets hurt or property is damaged.
Personal Liability Insurance
Personal liability insurance is used to cover you against lawsuits that might arise because something happened to someone else on your property. This could be either property damage or an injury that might have occurred. Liability insurance usually pays for your defense in court, if necessary. The amount of liability insurance coverage provided by a policy is usually stated for “each occurrence.”
Medical Payments to Others
Medical Payments to others is a second form of liability insurance that pays for medical treatment for those that might be injured in your home or on your property. Medical payments covered could include doctor’s fees, x-rays, hospital stays and similar expenses.