Of all the assets we own, our home is arguably the most precious. Not only does it inhabit everything we have held dear to us, but also it provides us shelter in times of need. We feel the safest when we are inside our homes, don’t we? Until one day, it is our home that needs protection, and hell breaks loose.
Don’t worry, this apocalyptic tale isn’t meant for you if you have already availed for homeowners insurance. For those who haven’t, homeowners insurance is that bastion of safety which protects your house and its possessions from threats of theft, burglary, and also provides liability protection during accidents. It is absolutely imperative that we educate ourselves about homeowners insurance, and this article will try to do just that.
What is homeowners insurance?
An insurance coverage that protects the homeowner from hefty damages caused by accidents, theft, burglary, flood, or many other calamities is homeowners insurance. A person can effectively transfer the liability of these damages to the insurer by paying him premiums, a risk-assessed value regularly. For the ease of understanding, we would like to divide the insurance coverage into 4 heads:
1) Personal property: This gives protection to the furniture, electrical appliances, and other possessions present inside the house.
2) Dwelling coverage: This segment deals with the protection of the external and internal physical infrastructure of the home and covers damages involving that.
3) Liability protection: Liability protection is protecting the property of the guests which can potentially be damaged while they are visiting. Besides, it also covers all the medical costs needed by your guests if they suffer from any accident while at your place.
4) Loss of use: What happens when our home needs repair such that it becomes temporarily uninhabitable for us? The homeowners insurance steps in, and covers the living and transportation costs one needs to pass those days.
However, all the above facilities have a limit. The limit depends on your annual premium amount. Higher the amount, greater is the coverage.
What should be known while buying homeowners insurance?
- Don’t forget to compare while you shop: The homeowners insurance has become mandatory in many situations nowadays, so we all need to get it more or less. However, while buying homeowners insurance, we shouldn’t ever settle for one insurance quote.
We should check other companies, compare their prices, and also look into customer reviews. After getting a fair idea of the market, choosing an insurance plan is easier and definitely wiser. The Lemonade Homeowners Insurance is a good online portal to begin comparing. It provides reasonable insurance quotes for you to avail.
- Be sure about the level of coverage you need: The best way you can avoid paying more than you need to, is to be sure of what you need. Paying up for insurance is one of the inevitable costs we need to bear, and so learning a few methods of curtailing the costs won’t go in vain. Knowing about the levels of coverage is one such way. The common levels of coverage are as follows:
- HO1 COVERAGE: The most basic insurance policy is HO1 coverage, which will provide protection from only the 10 things listed below: fire and lightning, windstorm and hail, explosion, riots and civil commotion, theft, aircraft, vehicles, vandalism and malicious mischief, volcanic eruption,smoke.
- HO2 COVERAGE: This is a broader coverage that provides protection from 16 perils, including the 10 listed above. The other perils that are covered are: falling objects, ice, breaking down of home systems, electric damage etc.
- HO3 COVERAGE:The HO3 coverage is an even bigger insurance coverage compared to the previous two, as it is an open peril coverage. Thus, it will protect from all the above perils and also other aspects associated with home protection until such time it is excluded specifically from the plan. Normally, the “Act Of God” and “Act of War” are the 2 common exclusions, meaning any damage incurred by flood or earthquakes or other natural calamities won’t be paid for by the insurance company.
- HO5 COVERAGE: Despite being a fairly broad coverage, HO3 coverage lacks in personal property protection. It is equipped enough to protect the physical infrastructure of the house; however, the items inside it will be safer in the hands of the latter. Though HO3 coverage can also protect personal items, they give the cash value only. However, HO5 coverage can help in replacing the damaged personal property. Hence, if you own a lot of personal items in the interior of your house, this can be checked out.
Life isn’t easy for any of us. Amidst all the chaos, isn’t it comforting to know that our house is protected and safe? Homeowners insurance is your way of assuring just that. Thus,stop fretting and happy shopping!