One of the most daunting tasks for new home owners is the process of finding and purchasing the right insurance policy for their home. Although there are many resources available to help you find the right policy, it is important to first understand what you have to look for when buying home insurance. Policies are usually divided into six types of coverage.
Dwelling Coverage (Coverage A)
The dwelling coverage section refers to protection for your house itself, attached structures and internal components such as plumbing or heating. The type of dwelling coverage that you purchase will determine how much money you will be given in the event that you need to rebuild any of these parts of your property. It should be noted that this doesn’t apply to damage caused by most natural disasters as disaster insurance is something that must be purchased separately.
Other Structures Coverage (Coverage B)
This part of your home insurance plan pertains to other structures on your property that are not directly attached to your home. This can refer to buildings such as garages and tool sheds. Generally speaking, you will not get as much coverage for other structures as you do your dwelling. The coverage for other structures is usually 10% of your dwelling coverage. In the case that you really do need more than 10%, you may have some options for more coverage depending on the plan that you have.
Personal Property Coverage (Coverage C)
This section of your insurance plan will give you money to replace any of your personal belongings in the event that they are damaged or destroyed by an incident that your plan covers. To get the most out of personal property coverage, it is best that you have a home inventory taken in advance. In the event that you actually need to file a claim, you may have a hard time proving what you’re owed. A home inventory will serve as this proof and make the process go much more smoothly. If you have any extremely valuable items in your house, it may be advisable to purchase separate insurance for it as there are usually limits on the amount of personal property coverage that can be claimed.
Loss of Use Coverage (Coverage D)
There are certain events that might occur that prevent you from using your home, forcing you to make other temporary living arrangements. This typically happens if part of your home needs to be repaired and you’re unable to stay there for that period. This section of your insurance policy takes care of these expenses. This can include things such as the cost of hotel rooms and food.
Personal Liability Protection (Coverage E)
This part of your insurance is used to protect you from lawsuits. For example, if someone falls on your property and tries to sue you, personal liability coverage will absorb your monetary losses. This coverage usually requires a minimum of $100,000 for each claim. Some home owners choose to purchase more coverage if they have something that creates more risks, such as a swimming pool.
Medical Payment Coverage (Coverage F)
Medical payment coverage is used in order to pay the medical bills of someone who is injured on your property and doesn’t want to sue. Much less money can be claimed from medical payment coverage. It typically has a maximum claim of $1000.
When purchasing home insurance, it’s important to keep all of these sections in mind. Most companies have variables in place to take the different needs of different home owners into consideration. Be sure to discuss all of your concerns with your insurance agent before committing to the plan.
This article is copyright free.