What does home insurance cover?

A home insurance policy is essential to protect your property and belongings in the event of an emergency. Preparing for a disaster is the best way to be prepared, even if nothing happens. After all, your home is your biggest investment. So whether you are looking for a new policy rising costs Or if you want to better understand your plan, it’s important to know exactly what the insurance covers and what it doesn’t.

“Insurance doesn’t prevent accidents from happening, but it can provide a financial safety net when the unexpected happens,” says Steve Wilson, senior underwriting manager. Hippo Insurance-A home insurance company that operates in over 80% of the continental US

What does home insurance cover?

Your policy outlines what is and isn’t covered in terms of your home and you can find this in the home insurance policy declaration document (here An example from Allstate). You will receive one each year when you renew your policy or when you obtain insurance through a new provider.

You should know The average home insurance rate is about $1,400 a year And according to the online insurance marketplace, most people with a standard $1,000 deductible would pay $123 a month. Zebra. Your deductible also comes from the total amount you receive from your insurance company when you make a claim. For example, if you have a $1,000 deductible and an insured loss of $10,000, you will receive $9,000 from your insurer.

Wilson says you should check your policy every year to make sure the “coverage amount reflects the total value.” [your] “Home” that isn’t just your structure—it’s your belongings.


Your home (dwelling) and other structures

Homeowner’s insurance covers your home (sometimes called a house) up to replacement cost. So if you have $300,000 in housing coverage in replacement costs, that’s how much your insurance company will pay to rebuild your home.

What is covered?

Most policies cover the cost of repairing or rebuilding your home In extreme weather conditionsincluding:

  • the fire
  • the storm
  • cheers
  • lightning

“If you live in an area exposed to these risks,” you should get the right coverage for your home, says Angie Orban, a vice president of product management. Travelers, an insurance company. The most expensive claim is due to fire, she says.

Structures on your property that aren’t specifically your home, such as fences, detached garages and sheds, are also covered, according to Wilson. Your policy may deal with “other structures” by themselves or they may be included as part of the dwelling.

It’s important to know what it will cost to rebuild if you end up with a total loss. Other structures are usually covered up to 10% of the housing coverage. So with $300,000 of residence coverage, other structures would be covered up to $30,000.

To determine how much coverage you need, The Insurance Information Institute suggests Multiplying the total square footage of your home by the per-square-foot construction cost depends on where you live. Complete an application or talk to an insurance agent to find out how much insurance coverage you need based on the type of home you have, the materials used, home adaptations (if any), and other improvements you’ve made. the things For example, if you have added crown moldings or hardwood floors, this can increase the coverage of the residence.

What is not covered

Most standard policies do not cover damage caused by:

  • flood
  • Earthquake
  • Regular wear and tear

If you need additional coverage for one or more of these factors, you can usually purchase it as a separate policy through your insurance provider. You can shop for flood insurance using National Flood Insurance Program Or ask your current or prospective homeowner’s insurance company if they offer it.

Your personal belongings

Your personal items are items inside the home, such as furniture, clothing, and other items.

“Tell your insurance company when you update,” says Orbann. Even a new sofa or fancy rug can change your coverage. Let the company know when you sell or get rid of something, as this can reduce how much coverage you need.

What is covered?

  • Furniture (including rugs and lamps)
  • clothes
  • Equipment (eg bikes, exercise equipment)
  • Most jewelry and art
  • Collectibles and valuables
  • Electronics
  • Indoor plants

Contents coverage is usually about 50% to 70% of the dwelling coverage on your home structure. So a $300,000 structure means you can get at least $150,000 for your stuff.

For most things, you don’t need to prove your ownership in order to claim them. But keep in mind that when you file a claim, and your insurer asks for a list of what’s been damaged or stolen from your home, they may also ask for proof of ownership. You usually have wide latitude Regarding the evidence you have provided. This can be a bank statement, receipt, photo of the item, or anything else that shows ownership of the item you’re claiming.

It’s a good idea to take photos of your inventory regularly. That way you are prepared if something catastrophic happens and you can prove your ownership through those photos. Try to save and file receipts for large purchases.

What is not covered

  • Tenant property
  • Some jewelry restrictions
  • A limitation or cap on certain items

If you own a rental property, the contents of those rooms are usually not covered under a standard policy.

While most personal belongings are usually covered, not everything is. For example, boats and motor vehicles are not covered by your policy, but have their own separate coverage, just like car insurance. Most policies are written this way too Excludes electric bikes and scooters.

Some items have certain exclusions, such as jewelry, and can only be replaced in specific circumstances. Since jewelry is a high-ticket item, your policy can only replace the value of the jewelry up to a certain amount. This means if you have a $20,000 necklace or ring, you may only receive $1,500 in standard payments if it’s lost or stolen.

Many providers will cover your jewelry if you travel Establish approval (sometimes called a floater). This adds extra protection to your jewelry that is not covered by a standard policy. Additional costs are minimal or in some cases, there is none. If you have expensive collectibles, antiques or jewelry, a floater or endorsement may be necessary to fully cover everything.

“It’s always a good idea to review your homeowner’s policy to make sure you’re covered,” says Wilson. This includes any time you make a high-ticket purchase like a new TV or bed. It should take you anywhere from 10 to 30 minutes to do this – maybe less if you review your policy regularly or haven’t made any major updates.

Obligation

Liability covers you against lawsuits for injury or property damage from your home. This includes damage caused by pets.

“If someone slips and falls or is injured while on your property, you could be held liable,” says Wilson. In 2020, about 32 million people had unintentional injuries at home that required medical attention, according to National Security Council.

What is covered?

If you’re on the hook for a payment—whether it’s a medical bill for someone else or someone suing you—it can be financially devastating. Here’s what’s typically included in liability coverage:

  • Personal liability (arising from an accident on your property and you are found to be at fault)
  • Medical expenses If someone is injured in your home, they may be able to get compensation from your insurance
  • lost wages Because of those injuries
  • death benefit If someone dies from an injury on your property

Most liability limits are around $100,000 for each claim, but you can buy more if you have expensive assets (or a lot). Liability claims account for less than 3% of all homeowners insurance claims, According to Experian. The liability portion of homeowner’s insurance goes for about $10 for every $100,000 of coverage.

What is not covered

  • Car accidents
  • Business-related injuries
  • Damage caused by dog ​​bites or neighbor’s pets (may be covered on your neighbor’s policy)
  • Intentional Injury (If you intentionally injure someone on your property, you are on your own)
  • Injury to others living in the home (this is for health insurance)

A standard policy covers friends or visitors in your home. It does not cover your own family within the home. Typically, if someone is injured in your home, their health insurance will pick up the tab and then send the bill to your homeowner’s insurance.

Anything your pet does you in yours Your homeowner’s insurance policy doesn’t cover the house (although it may be covered by your health insurance). Also, whatever pets do who Your home is not covered either.

Optional living expenses

If your home is seriously damaged or destroyed through no fault of your own, you may be covered if you have to move to a hotel or find alternative or additional accommodation, or find temporary accommodation for your family through ALE.

What is covered?

Additional living expenses kick in if the damage is caused by a disaster mentioned in your policy, such as a fire or storm. This includes things like:

  • Temporary rental costs or hotel stays
  • Restaurant food
  • Boarding and related costs for pets
  • Laundromat costs
  • Mileage
  • storage
  • Rent (if you are collecting rent from a tenant who moved into the same property)

The coverage amount of ALE varies from policy to policy. You may receive a lump sum up front or you may need to submit receipts to receive reimbursement.

What is not covered

There is a limit to how much coverage you get, anywhere from 10% to 50% of the dwelling limit (ie the cost of repairing your home in the event of a total loss.)

For example, if your home coverage is $300,000, your insurance may cover up to $150,000 in ALE. It’s also important to know that while you may be covered for a restaurant meal, say, your insurance company may put a cap on the dollar figure that’s considered a reasonable amount.

There are also some things that aren’t covered, which means you’re on your own if you get displaced. For example, in areas prone to many floods or earthquakes, your standard policy may not cover the displacement of your family while your home is being repaired during one of these events.

How to File a Home Insurance Claim

If you are ready File a claimContact your agent and they will send you forms to complete and an insurance adjuster will come to your home to assess the damage.

According to the type of damage, You may see more than one payment: For an advance payment and any remaining amount of the total settlement. Most policies require claims to be made within one year of the incident. Sometimes payments are made to you and sometimes they are made to a contractor, depending on the type of claim you have and your provider.

This may take a few days to a few weeks Get your moneyDepends on your insurance provider. Each state has its own rules for how long providers can take to pay claims. Your homeowner’s insurance costs may increase after you file a claim.

If you are experiencing problems with your insurance company, you may want to Submit a complaint In the Consumer Financial Protection Bureau’s Consumer Complaint Database.

Any advice, recommendations or rankings expressed in this article are buy-side from the WSJ editorial team, and have not been reviewed or endorsed by our professional partners.

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