Homeowner’s Insurance or hazard insurance usually covers damage to your property against theft, damage and personal liability (legal responsibility) for any injuries and property damage your household may cause other people. But unlike owning a car, one can legally own a home without homeowner’s insurance.
To protect one’s own interest, however, it is prudent for home owners to have insurance. As different states offer varying levels of insurance policies, it is best to consult with your local insurer to make sure that you are properly covered.
The standard policy for homeowner’s Insurance is referred to as HO-3, which offers basic protection for homeowners. These include:
- Coverage for owner’s refrigerated items (in the event of a power outage, the spoiled foods can be covered up to $500).
- Liability coverage. This is applicable towards slander, libel and dog-bite lawsuits. Usually, liability coverage starts at $100,000 but experts recommended that homeowners have a liability coverage of $300,000-$500,000 worth of coverage.
- Miscellaneous accidents.
- Falling objects such as burst pipes, falling snow or defunct satellites.
- Coverage for students’ personal property. This provides the homeowner (and children) peace of mind to know that the personal possessions are covered under the parent’s policy if the child is living in an on-campus dormitory.
- Medical payments. Homeowner’s insurance covers medical payments for individual(s) hurt on your property.
- Homeowner’s insurance pays for structural damage to the home as well as unattached structure such as a storage shed, fence or detached garage.
- Personal property. Homeowner’s insurance covers the contents of the house in the event that they are stolen, damaged or destroyed.
Typically, a policy for homeowner’s insurance covers property damage caused by fire, windstorms, hail, lightning, theft or vandalism. It will not cover damage caused by natural disasters such as flood, nuclear accident, war, earthquake and other catastrophes. If you do live in a high-risk area prone to natural catastrophes, you may want to purchase additional insurance.
Homeowner’s Insurance does not cover:
- business equipment
- loss of art or jewelry over a certain amount
- wear and tear
- neglect or failure to make repairs
- corrosion, deterioration, decay or rust
- feng
- increased cost due to the enforcement of any building regulations
- government actions
- power failures
- animals or pests
Keep in mind that you, as the homeowner can proactively take steps to make your home as safe as possible by securing the home with deadbolts and window locks, maintaining smoke detectors, installing a fire alarm and keep the walkway clear of snow and ice. In fact, if you do not take these steps, your homeowner’s insurance may not cover your damages.
