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What Does Homeowners Insurance Cover?

By Compuquotes Team on September 3rd, 2009
Homeowners Insurance

As soon as you buy a home, it is vital that you take out an insurance policy that will cover you in the event of a natural or man made disaster. But what exactly is covered under an insurance policy? That will all depend on the type of policy that you actually take out. Below are some of the most common policies, and what they are likely to cover. However, it is important to read the fine print of any policy, as each insurance company is likely to have its own exclusions.

Homeowners Insurance

A basic homeowners insurance policy will cover you in the event of damage caused by fire, hurricanes, severe storms and tornados. It is important when you are taking out a policy that you are adequately insured though. This is your responsibility, not the responsibility of the insurance company. Make sure that when you take out your policy, you cover yourself for the full cost of rebuilding in the event of a disaster.
It is important to realise that most standard homeowners insurance policies do not cover the costs of damage caused by floods, earthquakes or war. If you live in an area prone to either flooding or earthquakes, you will need to take out separate insurance policies to cover against these disasters.

Home and Contents Insurance

This type of insurance policy will cover both the rebuilding costs in the event of a disaster, and also the cost of replacing any contents that were damaged. Again, you need to ensure that you estimate the cost of your contents accurately. Many people find that they are under insured when it comes to replacing their actual property. It is better to overestimate the cost of your contents a little, and pay a slightly higher premium than it is to underestimate the costs.

Home and contents insurance also covers you in the event of a burglary. You can submit a claim for your contents alone, without the house having to be damaged in any form.

Dwelling Insurance

This covers you for any damage to free standing buildings, such as garages, storage sheds and fences. Some homeowners insurance policies will cover these in their policy, but others will not, so make sure you know whether you need to take out separate dwelling coverage or not.

Liability Insurance

Some homeowners insurance policy automatically include this type of coverage, while others don't. If not, it makes sense to add it to your policy, so that you are covered in the event that someone injures themselves on your property.
Many people underestimate the importance of homeowners insurance, and so they are inadequately insured. Then when a disaster occurs, they find that their rebuilding costs are not covered, and they cannot afford to rebuild with money from their own pockets. Understanding your insurance policy, and taking out extra insurance if required will help to save you a lot of stress in the event of a disaster. Life is unpredictable, but you can ensure your peace of mind by being adequately covered.

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