What Kind of Coverage We Need for Home Insurance
- A homeowner could be exposed to financial liability if someone other than the insured family is injured at the home or if guests' property is damaged. Mortgage lenders virtually always require homeowners to have liability coverage. If you are a renter and an accident occurs at your home wherein other people are injured or their property is damaged, you also could have exposure to financial liability. Liability insurance helps protect the insured homeowner or renter against potentially devastating financial loss in the event the covered person is found to be liable, whether that person is a tenant or a homeowner.
- Personal property insurance provides reimbursement to you, within the limitations of your insurance policy, in the event that your personal property in your home is stolen, damaged or destroyed. Personal property is another way of describing the contents of your home. It is different from the systems that are installed your home such as air conditioning, heating and plumbing. Personal property usually includes appliances, furnishings, bedding and clothing. Some items of personal property such as firearms and jewelry may not be covered unless they are declared and insured separately. Or, they may be covered but only within strict limits. Insurance policies can vary, so it is important to understand the exclusions and limitations of the policy. Homeowners and renters alike can purchase personal property insurance.
- A peril is an event or a condition that causes loss. Windstorms, fires and burglaries are examples of perils that can be covered though insurance. If you have a home loan, coverage that protects structures against covered perils is virtually always required by the lender, and the lender imposes requirements for the appropriate amount. This insurance that covers the main home is often called dwelling insurance. An additional kind of coverage called "other structures" may also be required by the lender. This insurance covers structures that are not attached to the main house, such as detached garages, guest houses and out buildings.
- Imagine that a covered peril such as a fire or windstorm damages your home so badly that you cannot live in it until it is repaired or rebuilt. It does not matter whether you are a homeowner or a renter. You would need a place a live until your home can be occupied again. Coverage called "loss of use" is designed for just such situations. It helps cover the costs of temporary housing so you can maintain a normal standard of living while the home is made whole again.