Homeowners insurance coverage is important to protecting an individual’s house and possessions. A homeowners insurance policy will cover the dwelling, contents and liability protection. Many first time home owners are not aware of all the possible risks and costs that come with owning and maintaining a house.
The most basic premise of a home owners insurance policy is to provide coverage for a loss to the dwelling or house. A loss can come in the form of fire, wind or any other type of weather related damage. If an individual has a home in the north where it can get cold extra care needs to be taken so water pipes do not freeze. When insuring a dwelling insurers look at the replacement cost value or the amount it would cost to repair or rebuild the entire house. Generally this value is much more than the appraised value of the house because of the costs of building materials.
Replacing the contents of a dwelling or outbuilding such as a garage is another important piece of a homeowners policy. The contents of a home can be damaged by fire as well as vandalized or even stolen. Contents coverage will provide coverage for any of these events for the general contents that are not excluded on the policy. Usually, items such as coins, jewelry, guns and golf clubs as well as similar items need separate coverage on a home policy. This is done by scheduling or itemizing the items and providing a specific dollar amount per item.
Another reason that homeowners insurance is important is because there is coverage that is provided for liability. Liability coverage provides protections for accidents that can occur to guests or anyone who gets hurt while on an insured’s property. Protection is also provided for legal costs in the event an insured gets sued. Keep in mind that even the best of friends can get sued especially if children are seriously injured. Normally, though liability insurance can be seen as a precaution to an unforeseen accident that may or may not occur.
Homeowners insurance provides coverage for many risks that may not be known to first time home owners. All home insurance polices contain exclusions so it pays to always read over the policy to see what those exclusions are. Many home insurance policies for example do not cover damage due to flood or earthquake. Always consult with an agent or insurance representative to determine what coverages may or may not be needed.