What Does Your Homeowner’s Insurance Cover?

Many homeowners don’t know the fact that a homeowner’s insurance policy covers more than just the individual’s house. You must be aware of what your policy includes and what it excludes. For example, most people aren’t aware of this: More than 30% of U.S. heads of household who have homeowners insurance mistakenly believe flood damage is covered by a standard homeowners policy. Flood Insurance is in a category of its own and it is provided by the government rather than your local insurance company.

Most people think when they call an insurance agent and ask for homeowners insurance that all policies are the same. They are not. Regardless of what state you are in, there are different policies. To avoid making costly assumptions, it pays to know what’s included in your policy, especially because homeowners policies may differ from state to state.

Here are several surprising coverages that are typically included in homeowners insurance.

Mandated Upgrades and Spoiled Food Coverage
While home insurance policies vary, the standard basic policy is called an HO-3 home policy. Some insurance companies might call it something else, but HO-3 is the common name for it. This policy provides coverage for “ordinance or law,” which covers costs associated with bringing the property up to code after a covered loss.

For example, “If a house burned down and a new law requires homes to have sprinklers as in the state of Pennsylvania, upon rebuilding, the sprinklers would have to be installed. This coverage provides the money to do that, but there is a limit that is a percentage of the home coverage.”

The basic homeowners policy also provides coverage for the owner’s refrigerated items. If a power outage spoiled all your freezer and fridge items, the insured has coverage for up to $500 under this particular policy.

Slander, Libel and Dog-Bite Lawsuits
Homeowner’s coverage also protects you against liabilities such as oral or written publication of material that slanders or libels a person or organization.
The liability also protects dog owners. It provides a dig-bite protection for no additional cost. That protection can prevent a claim from taking a huge bite out of your bank account. An Insurance Information Institute study found the average cost of dog-bite claims was $26,166 in 2010, up from $24,840 in 2009.

Miscellaneous Accidents

If you were on a joy ride on your bicycle and accidentally drove into someone else and injured them, the medical and other bills will be collected from your homeowner’s policy. Or if you were on a business trip and while joking around, ended up injuring someone, the liability on your homeowner’s would cover that. The only time the liability will not cover damages will be if you injure a person on purpose.

Consumers should check their coverage whenever they suffer a loss or have a claim against them as it involves their property.

Additional Living Expenses and Falling Objects

Damage caused by the weight of snow on a property, burst pipes and additional living expenses are also covered by homeowners insurance at no extra cost. For example, if a home is uninhabitable after a storm, which many homeowners faced following Hurricane Irene, the insurer will pay for hotel and restaurant bills.

However, some insurance companies limit the amount of coverage or amount of time they will cover bills for the insured. Check with your insurance agent for any limits or restrictions.

Damage caused by falling objects, such as defunct satellites, is also covered under standard homeowners insurance policies. The coverage includes damage to the property as well as belongings within the home.

Student Property

Home insurance also provides property coverage to members of your household. If a homeowner has a student away in college, the child’s personal property is covered under the parent’s policy. In fact, students who live in an on-campus dormitory will have most of their personal possessions covered under their parents’ homeowners insurance policy, according to the Insurance Information Institute. This coverage, typically called personal property coverage, is included at no extra charge.

However, students living off campus may not be covered by their parents’ policy and may need their own renters insurance.

Know What’s Not Covered

As I mentioned earlier, flood insurance isn’t covered in homeowner’s policy. Flood coverage is available through the federal government under the National Flood Insurance Program, but insurance agents sell the policies.In addition, basic homeowners insurance won’t pay for damage caused by an earthquake, routine wear and tear, or basic maintenance. If the insured’s heater or air conditioning unit breaks down because of old age, home insurance policies do not provide any coverage. And if you have jewelry stolen from your home, there is a limit on the amount of coverage provided. If you have special collections or items of above-average value, you need to make your agent aware of it, so you can decide if you would like to purchase additional insurance to cover it.

Now that you know what is covered and what isn’t, call your local agent to find out if that applies to your policy.

3 thoughts on “What Does Your Homeowner’s Insurance Cover?

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