If you own a home, you probably worry about what will happen if your home sustains damage from something outside of your control. What would you do if a hurricane, tornado, lightning or a fire impacted your home? To protect yourself, your family, and your home from a significant financial burden, you have probably purchased, or are thinking about purchasing, homeowners insurance. It is important that you understand what to look for and what to expect from your policy.
Your Home’s Structure
When thinking about damage to your home, the first thing that comes to mind is probably the actual structure of your house. With homeowners insurance, your home will be protected from any disaster listed in your policy. Usually homeowners insurance does not cover floods, earthquakes or general wear and tear. If your home is destroyed partially or completely, your policy will cover the cost to repair or even to rebuild your home. Most policies also cover garages, tool sheds and other detached structures.
Your Personal Belongings
One thing that many people don’t consider when thinking about the protection of their home is their personal belongings. Furniture, clothes and other personal items can be protected if damaged as the result of a covered disaster. Even your outdoor plants and trees could be covered, as long as the damage to your favorite potted plant was not caused by wind or disease.
The best thing to do when deciding if you have enough coverage for your possessions is to create a household inventory. Walk around your entire house with a notepad or even a video camera and record everything you need covered through insurance, especially valuables.
Liability Coverage
One important thing to consider is liability coverage through your homeowners policy. What would happen if your daughter threw a baseball through your neighbor’s bay window? Liability coverage can pay for the damage to the window, as well as any bodily injury claims should the baseball harm any people inside. If someone is injured inside your home, they may be able to simply send their bills directly to your insurance company, and there won’t even be a liability claim against you. Bear in mind that this coverage does not pay any property damages to your own home or medical bills for your own family.
Additional Living Expenses (ALE)
Another coverage you should consider is Additional Living Expenses (ALE). Should the damage to your home be so significant that you cannot live there until it is repaired, this coverage may reimburse you for bills from restaurants and some costs at your hotel. The money used for this coverage is totally separate from what is used for your home repairs and personal belongings so you don’t have to worry about using up the money that would have been used to restore your home. For some insurance companies, this coverage may even apply if you have been renting out part of your home. The money that the tenant would have been paying you could be refunded.
Owning a home is an amazing milestone in a person’s life. Don’t let the stress of “what if” situations take away from that joy. Get a homeowners policy today and be covered from disaster.