Types of Insurance
There are many different types of homeowner’s insurances that have specific parameters that apply to the type of structure it is. These include policies for condos, mobile homes and older houses. Your coverage can also be as comprehensive or as basic as you prefer, and you can pick and choose exactly what your policy covers. General types of home insurance include:
- Dwelling – for the home itself and other freestanding structures
- Contents – for your personal belongings
- Liability – protection for you in case of damages to others
What Does It Cover?
The primary purpose of a home insurance policy is to cover damage to your home’s structure. The policy pays for the cost to rebuild your home from the ground up, including electrical wiring, plumbing and heating. It also includes coverage for other components on your property with percentage limits typically applied including:
Freestanding structures outside your house, including a shed and fencing.
Your personal belongings – reimburses you for the cost to replace personal items that are damaged or destroyed because of theft, fire, or some other type of loss.
Loss of Use, which covers personal expenses you would incur if you couldn’t live in your home due to damages.
There is also a liability coverage portion, which protects your assets and finances in case someone sues you for damages or injuries that you are found to be at fault for to someone else. This may also include medical bills that another person has because of something that happened on your property.
Homeowners insurance does not cover earthquakes or floods – you need to buy separate policies for those if you want those coverages. Basic homeowners insurance protects you from the following perils:
- Fire and/or Smoke
- Damage from Vehicles
- Damage from Aircraft
- Riots and civil commotion
- Volcanic Eruption
Individual home insurance policies will differ among insurance companies. It’s a good idea to check with your insurance agent to find out exact rates, coverage limits, deductibles and policy types.