What is Homeowners Insurance?
Homeowners insurance provides financial
protection against disasters. A standard policy insures the home itself
and the things you keep in it.
Homeowners insurance is a package
policy. This means that it covers both damage to your property and your
liability or legal responsibility for any injuries and property damage
you or members of your family cause to other people. This includes
damage caused by household pets.
Damage caused by most disasters is
covered but there are exceptions. The most significant are damage caused
by floods, earthquakes and poor maintenance. You must buy two separate
policies for flood and earthquake coverage. Maintenance-related problems
are the homeowners’ responsibility.
How Homeowners Insurance works?
Different policies exist for renters,
owners of mobile homes, people seeking bare bones coverage and those
living in homes that are very old, but most homeowners will purchase
what is called an HO-3 policy. This insurance policy covers your home
and its contents against damage and theft, as well as you, the owner,
against personal liability if someone is injured while on your property.
This coverage also includes damage
caused by pets and most major disasters, thoughfloods and earthquakes
require separate policies. Homeowners insurance does not cover problems
that result from poor maintenance or general wear and tear.
A basic homeowners insurance policy
should also cover other structures on your property and should provide
for living expenses in case you are not able to live at home after a
fire or other insured disaster. The amount of coverage provided for each
of these items varies depending on the insurer and the type of policy.
