A standard homeowners insurance covers four primary areas that hold the most value and present the highest risk. This policy is used to secure your investment against most types of loss. If you experience a loss in one of these areas, you must file a claim to be adequately reimbursed. This prevents you from having to pay for any significant expenses out of your own pocket. With the right homeowners’ policy, you can rest easy that most of your expenses will be covered.
The following are the four most important areas covered by home insurance.
The Structure of Your Home
Your Personal Belongings
Additional Living Expenses (ALE)
Your home is one of the most expensive investments you will ever make. A homeowners policy will ensure that proper repairs can be made or that your home can be rebuilt if it is extensively damaged or destroyed. You will need to decide if you want to insure your home for its cash value or its replacement costs. These two figures may be drastically different, so it is important to talk to your insurance agent to determine which one is best for your needs.
Your personal belongings will also be covered. However, if you have antiques, collectibles, fine jewelry, or expensive works of art, you may need to purchase additional coverage. Standard insurance will only cover the base value of your items, not their appraisal value. Keeping an accurate and up-to-date inventory of all your possessions is the best way to protect yourself from loss. Most insurance providers are now recommending a video inventory to ensure you are compensated sufficiently.
Your standard homeowners’ coverage also protects you from many different types of liability claims, including personal injury and property damage. This protects you if a person is injured while on your property. It will also cover any property damage they may incur in the process. Liability coverage can protect you from high medical expenses if someone’s injuries are severe. Without proper liability coverage, you may go bankrupt just by covering medical costs.
If something happens to your home, you may not be able to live there while repairs are being made. This is when additional living expenses may be required. The ALE will allow you to cover the cost of finding shelter while your home is being prepared or rebuilt. Additional living expenses may cover a hotel room or a rental property, depending on how long you will be displaced from your home.
Know What Is Not Covered
When you first look at a policy, you need to understand the exclusions. While there are a few that you may already know, you must also look at the bigger picture. Hurricanes, earthquakes, and floods are generally not covered by a standard homeowners policy. These types of events often cause major damage and require their own form of insurance. Where you live will determine which types of insurance you will need. Some places may require all three, while others may not require any of these additional policies.
Understanding what your standard homeowners insurance policy covers is important. Speaking to an expert is the best way to understand what is covered and what is not. Call us at Udell Family Insurance and schedule an appointment with one of our reputable agents. We have the answers that will help you get the coverage you need at a cost you can afford. Contact us today to get started!