Homeowners insurance is one of the most powerful ways to protect your property and personal belongings in the event of damage, natural disasters, theft or personal liability. You’ll almost always need to get homeowners insurance when applying for a mortgage, and it’s generally considered a smart move.
Your home is probably your most valuable asset, and it’s not a good idea to leave it unprotected. Check out what home insurance covers and why it can be a smart investment.
What is homeowners insurance?
Homeowners insurance is a type of protection that covers damage to a property, theft or loss of belongings within the home, and personal liability for injury to others. Sometimes it can cover alternative housing costs while you wait for your home to be rebuilt.
Home insurance policies can vary widely, but they all generally cover the same basics. For additional insurance, you may want a more comprehensive policy or one that covers your specific needs.
|fact||Usually covered||Sometimes overcast||Rarely or never covered|
|The dog bites||✓|
Understand home insurance
Let’s take a closer look at homeowner insurance coverage and what you need to know.
Damage to the inside or outside of your home
If your home is damaged by a disaster such as fire, hurricanes, lightning, or vandalism, your homeowners insurance provides funds to repair or completely rebuild your home.
The insurance cover often also extends to the contents of your home, such as furniture, appliances and other valuables. As long as it’s covered by an insured catastrophe, you should be able to get full market value. In most cases, destruction from floods, earthquakes or poor home maintenance is not covered by general policies and you will have to pay extra for this protection.
Art, expensive clothing, and jewelry may not be covered by all home insurance policies, or may have limited coverage for these items. Therefore, listing your valuables is important if you want them to be protected. You usually have the option of insuring these items as floaters on your existing homeowners policy, or you may want to insure them separately with jewelry specialty insurance.
Personal Liability for Damage or Injury
Personal liability protects you from lawsuits for damage, injury, and other harm caused by you, your home, or someone in your household.
Say your dog bites someone and they sue you for their medical bills, or your child goes to a friend’s house and breaks a valuable piece of decoration – these are just a few of the scenarios where home insurance can protect you. The amount of coverage you get for personal liability depends on your specific policy and how much coverage you have paid for.
Hotel or home rental while your home is being remodeled or repaired
In the event of a disaster that causes major damage, you may need to find additional housing until your home is repaired or rebuilt. If you ever find yourself in this situation, you’ll be grateful for homeowners insurance as it can reimburse you for rent, hotel, and meals.
The policy sets daily limits on how much you can spend, but you may be able to increase this amount if you pay more for your policy.
Types of homeowners insurance
Home insurance coverage is unique to your situation. The type of coverage you get and the catastrophe payout depend on how much you are willing to pay for a policy. Here are the three most common types of coverage at a glance.
Current monetary value
An actual cash value policy covers the entire cost of your home in the event of a disaster, as well as the value of your property. Depreciation is usually taken into account.
A replacement cost policy works like an actual present value policy; The main difference, however, is that no depreciation is deducted on this policy. This means you can repair or remodel your property up to its original value.
Guaranteed or extended replacement value
This policy is usually the most generous, as it will cover the full restoration of your home, even if the cost exceeds your original policy limit. With an extended replacement, you may be able to access up to 25% more coverage than you purchased. This feature can help offset the cost of rebuilding your home, especially at current prices taking inflation into account.
What is not covered by homeowners insurance?
Most home insurance policies do not cover jewelry, artwork, and other collectibles. Protection against identity theft, damage from earthquakes or floods, damage from vermin or mold, and maintenance repairs are also typically not covered.
If you live in an area prone to floods or earthquakes, you will have to pay more to get insurance coverage in those areas.
Even in scenarios where your home insurance covers valuables in your home like art or jewelry, it generally doesn’t cover the full amount unless you make special arrangements for coverage and pay more for your policy.
Recommended additional insurance cover
Since not all of your belongings and valuables are covered by home insurance, you should opt for additional protection. In the event of a disaster, burglary or misplaced items, you want peace of mind that their value isn’t lost forever.
Take a look at some notable options for additional insurance coverage.
Additional coverage for living expenses
Homeowners insurance covers basic living expenses if you are evicted from your home. However, most policies tend to have strict limits on daily expenses.
Additional Living Expense (ALE) coverage goes a step further than traditional homeowners insurance to ensure you have enough for room, board, storage and other costs incurred by finding temporary housing.
Coverage of specialty or investment jewelry
Homeowners insurance policies don’t always cover your high-priced jewelry, and even when a policy does, it’s rare that you’ll get a full refund. If homeowners insurance isn’t enough to cover your investment jewelry, you should opt for a policy that offers full protection, e.g. B. one from BriteCo.
BriteCo offers affordable yet comprehensive insurance policies that protect your valuable jewelry at up to 125% replacement value. Opt for specialty insurance that covers loss, theft, damage and mysterious disappearance with no excess. Learn more at BriteCo.
A single lawsuit can do significant damage to your finances. Liability insurance protects you if someone is injured on your property or if you or someone living in your home accidentally injures another person or damages their property. Such scenarios can lead to lawsuits, which in the worst case can lead to significant financial damage.
Although most home insurance policies offer some protection against personal liability, it is rare to find full coverage. If you have children or don’t want to be held liable if someone is injured in your home, purchasing additional liability insurance can provide peace of mind.
Don’t worry about your insurance coverage
Homeowners insurance offers significant coverage to protect your most important assets. This includes your home but can also extend to the valuables in your home, the cost of living in the event of eviction, and personal liability.
Almost all mortgage providers require homeowners insurance. But the exact policy you get is ultimately up to you. You may want a general policy or more comprehensive coverage. In many cases, it may also be advisable to take out additional insurance for your most valuable possessions, such as art or jewellery. When it comes to insurance, it’s better to be safe than sorry.
The best home insurance providers
Are you looking for home insurance but don’t know where to start? Take a look at some top home insurance policies.
How much does homeowners insurance cost?
Contrary to popular belief, home insurance doesn’t have to be expensive. The average cost of homeowners insurance in the US is $140 per month.
Is flood damage covered by household contents insurance?
If you live in an area at risk of flooding, flood damage is not automatically covered. Instead, you’ll have to pay more to get this coverage, and you’ll likely have to buy coverage from a flood insurance company.
How much does it cost to insure jewelry?
While some home insurance plans offer coverage for jewelry, most are limited. If you own high-priced jewelry, it may be worth getting jewelry-specific insurance, as this is the best way to get full coverage. BriteCo is a leading jewelry insurance provider offering affordable plans and up to 125% reimbursement.
What happens if you lose an insured ring?
You will need to make a claim with your insurance provider and discuss the details of the damage. You should be able to obtain a replacement ring of equal value and your insurance company should work with your jeweler of choice to ensure you are happy with the replacement. If you are covered by a homeowners policy, you will likely receive funds up to the allotted amount of your policy.