A Standard Homeowners Policy?

As homeowners, we all carry insurance to protect our house, possessions, and most importantly our family and visitors, but many do not know how their policy works and what it covers. A standard homeowners insurance policy includes four essential types of coverage, they are: 

1. The Structure of Your House 
   This part of your policy pays to repair or rebuild your home if it is damaged or destroyed by fire, hurricane, hail, lightning or other disaster listed in your policy. It will not pay for damage caused by a flood, earthquake or routine wear and tear. When purchasing coverage for the structure of your home, it is important to buy enough to rebuild your home. Most standard policies also cover structures that are detached from your home such as a garage, tool shed or gazebo. 
2. Your Personal Belongings
   
   Your furniture, clothes, sports equipment and other personal items are covered if they are stolen or destroyed by fire, hurricane or other insured disaster. Most companies provide coverage for 50% to 70% of the amount of insurance you have on the structure of your home. The best way to determine if this is enough coverage is to conduct a home inventory. This part of your policy includes off-premises coverage. This means that your belongings are covered anywhere in the world, unless you have decided against off-premises coverage.You have up to $500 of coverage for unauthorized use of your credit cards. Expensive items like jewelry, furs and silverware are covered, but there are usually dollar limits if they are stolen. To insure these items to their full value, purchase a special personal property endorsement or floater and insure the item for it's appraised value. Trees, plants and shrubs are also covered under standard homeowners insurance.  
3. Liability Protection
   
   Liability covers you against lawsuits for bodily injury or property damage that you or family members cause to other people. It also pays for damage caused by your pets. So, if your son, daughter or dog accidentally ruins your neighbor's expensive rug, you are covered. However, if they destroy your rug, you are not covered. The liability portion of your policy pays for both the cost of defending you in court and any court awards-up to the limit of your policy. You are also covered not just in your home, but anywhere in the world. Liability limits generally start at about $100,000. However, experts recommend that you purchase at least $300,000 worth of protection. Some people feel more comfortable with even more coverage. You can purchase an umbrella or excess liability policy, which provides broader coverage, including claims against you for libel and slander, as well as higher liability limits. Generally, umbrella policies cost between $200 to $350 for $1 million of additional liability protection. Your policy also provides no-fault medical coverage. In the event a friend or neighbor is injured in your home, he or she can simply submit medical bills to your insurance company.  
4. Additional Living Expenses (ALE)
   
   This pays the additional costs of living away from home if you cannot live there due to damage from a fire, storm or other insured disaster. It covers hotel bills, restaurant meals and other expenses, over and above your customary living expenses, incurred while your home is being rebuilt. Keep in mind that the ALE coverage in your homeowners policy has limits, usually a percentage of the amount of coverage you have on your home, and some policies include a time limitation. But the amount of ALE coverage is separate from the amount available to rebuild or repair your home. Many policies provide coverage for about 20 percent of the insurance on your house. You can increase this coverage, however, for an additional premium. Some companies sell a policy that provides an unlimited amount of loss-of-use coverage, but for a limited amount of time. If you rent out part of your house, ALE coverage also reimburses you for the rent that you would have collected from your tenant if your home had not been destroyed.

Read more details here.

Call us at 401-846-9629, for a free policy review;
we'll explain it all to you!

Content: Insurance Information Institute

* * * * *