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What does standart Homeowners policy imply?

A standard homeowners insurance policy will cover the following aspects. Therefore it implies:

  • Coverage for the structure of your home.
  • Coverage for your personal property.
  • Liability protection.

It will also include extra expenses in the case of the temporal inability to live in your own house due to the fire disaster or some other unfortunate event.

Insurance covering the structure of your house

Your home insurance policy covers the structure of your home if damaged by any disaster listed in the policy such as fire, hurricane, hail or lightning but will not cover damage caused by flood, earthquake or wear and tear. You should insure the structure of your house with enough cover to rebuild it.

Any structures that are detached from your home also tend be covered under a standard policy. These include garages, tool sheds and gazebos and are likely to be covered for approximately 10% of the total insurance although you should be able to purchase additional coverage if you wish.

Insurance covering personal belongings

Personal belongings such as furniture, clothes and sports equipment are covered by your home insurance against the likes of fire, hurricane, hail or lightning and companies generally provide coverage for 50-70% of the total insurance under a standard policy. A home inventory will determine if that represents enough coverage for your needs.

Your personal belongings are covered anywhere in the world unless you opted out of off-premises coverage. You could be insured for as little as 10% of the total amount of your possessions coverage as well as unauthorized use of your credit cards.

Jewelry, furs, silverware and other expensive items are covered but most home insurance policies offer coverage with a dollar limit against theft. For example, you can expect to be insured for between $1,000-2,000 for all such items. Full value coverage requires a special personal property endorsement which insures a specified item for its appraised value but must be purchased separately.

Standard homeowners insurance also covers trees, plants and shrubs against theft, fire, lightning, explosion, vandalism, riot and even falling aircraft usually for 5% of the total coverage – approximately $500 per item. Damage caused by wind or disease is not covered.

Liability protection insurance

A lawsuit resulting from any bodily injury or property damage caused by you or your family (including pets) to other people or their property is covered by liability protection. For example, you are covered if your dog destroys your neighbour’s carpet but not your own.

Liability coverage is worldwide – not just in your home and it covers the cost of defending you in court and any court awards up to your policy limit, which generally starts at approximately $100,000 although experts advise the additional purchase too raise the coverage to at least $300,000. An umbrella or excess liability policy provides broader protection, including libel and slander claims against you at a general cost of between $200-350 for $1 million of additional liability coverage.

No-fault medical protection covers against injury to any friend or neighbor injured in your home. He or she can then submit any medical bills directly to your insurance company allowed expenses to be paid without the need to file a liability claim against you. A standard policy offers $1000-5000 worth of no-fault medical coverage but does not cover your family or pets.

Insuring against additional living expenses

If you have to live away from home due to damage to your home from a fire, storm or other insured disaster, you can claim for any additional costs such as hotel bills, restaurant meals and other living expenses incurred while your house is being rebuilt. The amount of coverage varies across insurance companies but 20% of the total insurance is typical. This amount can be increased for an additional premium and some companies offer a policy that provides an unlimited amount of loss-of-use coverage for a limited amount of time.

This coverage would reimburse you for any rent you would have collected from a tenant had your home not been destroyed.

See other guides:
What is homeowners insurance?
Co-op or Condo insurance?
What does the standard homeowners policy imply? << You are here!
Home insurance and flooding
Is there a chance of having a house without insurance?
Why are home assets necessary?
Cancellation and Non-renewal: any different?

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