Understanding Homeowners Insurance
- HO-1 and HO-2 coverage do not insure the policy-owners’ personal belongings, and only protect against damages specifically listed on the policy.
- HO-3 coverage protects against all types of damage, except for those specifically excluded by the policy. HO-3 also protects personal belongings, but only for specific types of damage (typically at the HO-2 level).
- HO-5 offers the same coverage as HO-3, but extends full protection to all personal belongings. HO-5 is more expensive than HO-3, but experts recommend paying the higher premium. Some insurance companies do not offer HO-5, in which case riders can be added to the policy to provide greater protection of personal belongings.
- HO-4 and HO-6 only cover belongings, and only for the types of damage specifically listed on the policy. In a condo or co-op, the buildings will be covered by the insurance the board purchases for the entire complex.
Experts recommend that you purchase guaranteed replacement cost coverage, and insure 100% of the value of your home and contents. Guaranteed replacement cost coverage means the insurance company must pay the cost to replace the item or house as if it were new, ignoring any depreciation that occurred before the damage.
Why should you get a Homeowner Policy
Homeowners insurance protects the homeowner from financial losses against theft, storms, fire, and all other causes explained in your policy. Read your policy carefully to understand your coverages. Reading policy is not enough you should also know about your rights. All states have renter’s insurance and consumer bill of rights to help you in case you file a claim against home insurance company. Your home insurance company should send you bill of rights with policy. Don’t wait until you have a claim to review your policy and to know your rights.
Here are some reasons why you should get a homeowner insurance.
You are recommended to buy a Homeowners Insurance, which covers five or six coverages rather than specific policy for specific coverage. Buying separate policies will cost you much more. Homeowners policy include five coverages.
Dwelling coverage: This coverage of homeowners policy will pay you in case of damage to your outstanding building like garage or storage sheds and your home.
Personal property coverage: It will pay when your household items like furniture, television, freeze or clothing are stolen, damaged or destroyed.
Liability coverage: It protects you in case you are responsible for someone else’s injury or property damage. In such cases homeowners insurance will soon provide you with a minimum of $20,000 as coverage. Policyholders can buy an extra coverage of $1 million.
Medical payments coverage: It pays all medical bills if someone gets injured even in the premises of your property. Medical coverage also covers certain injuries such as your dog biting someone in your house. You can get a basic coverage of $500. This can be increased up to $5000 by paying extra.
Loss of Use: If your house is damaged due to any reason and you have nowhere to live, in such condition your living expenses will be paid by the homeowners policy.
Thus you can make your home and your life secure with Homeowners insurance policy.