So you’re looking into buying your first home. Congratulations! That’s a big move, but you’ll love having your own space. Of course, before you sign that dotted line, you will need to handle some business, like having the property inspected, securing financing, and signing up for homeowners insurance.
It can feel like a great big step, and there are plenty of things to know. So your friendly neighborhood insurance agency is here with the need-to-know basics you should keep in mind when deciding on a policy.
What Does Homeowners Insurance Cover?
There are three key areas of coverage that a solid homeowners insurance policy will address:
- Damage to Your House and Property: Whether from natural disasters or vandalism, your homeowner’s insurance policy will pay for repairs and even for your home to be rebuilt if need be. Check with your provider for details on covered disasters, and you can pretty much bet that for floods and other specific concerns, you’ll need to add on additional coverage. Your home, garage, and personal property can all be included on this coverage. High-priced possessions and collectibles typically need their own policy, or at least a rider, or add-on, to your main coverage.
- Liability: Liability coverage comes into play in the event of property damage or personal injury, and protects you from lawsuits, whether the covered event happens on or off of your property. This covers medical bills arising from pet attacks; or slip, trip, and fall situations; along with accidental damage to another person’s property. Liability coverage can also provide compensation for missed wages along with claims of pain and suffering.
- Housing During a Rebuild or Repair: If the worst case happens, and your home is destroyed or severely damaged, to the point that you can’t safely live in it, your homeowner’s coverage will step in to pay for lodging in the interim, while repairs are taking place. Housing would generally be in a hotel or a temporarily rented home. Additional costs, like restaurant meals and other incidental expenses are also typically covered.
In all of these cases, coverage limits will vary, based on several factors. You’ll need to discuss available coverage options with your insurance provider and see what policy best fits your current needs. Feel free to contact Althans with questions and to find the right coverage for you and your home.
What Is Not Covered By Homeowners Insurance?
While homeowners insurance does cover a wide gamut of potential perils, there are some common exclusions to be aware of. These often include flood, earthquake, and extensive sinkhole damage. Additional riders and separate policies are generally available for these risks.
Sewer and drain backups are also typically not covered, along with damage caused by normal wear and tear, or infestations of insects, rodents, or mold and mildew. Oftentimes, environmental factors that can be prevented or mitigated play into those latter pests. For these situations, repair and maintenance costs would not be covered.
Finally, damage caused by large scale political or governmental upheaval–like acts of war, terrorism, or civil unrest–is also generally not covered by a standard homeowners policy. Check with your policy provider to inquire about any other exclusions, and whether additional coverage options exist.
Types of Homeowners Insurance
Now you know what to expect as far as what’s covered and what’s not covered by a standard homeowners policy, but did you know that there are also different types of homeowners insurance out there? Yep, it’s true, and in fact there are eight different types of coverage available, commonly known as HO-1 through HO-8. But that’s a whole other layer of complication that you really don’t need to worry about when it comes to finding a policy that allows you to buy your first home.
Essentially there are three main categories of insurance, and what differentiates between these three is how the coverage amounts are calculated.
Replacement Cost
Replacement value policies do not factor in depreciation, so they would provide you with the funds to repair, replace or rebuild based on the original value of your home and property.
Extended Replacement Cost
This coverage level is the most comprehensive available, and it even pays for repair or rebuilding that exceed policy limits by up to 25% at the very most.
Keep in mind that the higher the replacement guarantee, naturally the higher the policy premiums will be. You’re essentially paying more upfront to absorb those higher replacement costs when you find yourself in the worst case scenario and need your home to be repaired or rebuilt.
Premium Home and Auto Insurance in Cleveland
Well folks, those are the bottom line basics on homeowners insurance–we hope this helped! There’s plenty more to learn, from jargony terms and hyper specific policy limits and exclusions, but those are bridges you can cross when you come to them. Or, if you want all those ducks in a row from the get go, you can get your answers now. But regardless of what or how much you need your homeowners policy to cover, be sure to reach out to the Althans team for expert advice and suggestions. We’re here to protect and preserve, and to answer all of your homeowners insurance FAQs.