Know What Your Homeowners Insurance Covers

Posted November 4th, 2010
by Staff (no comments)

Truth be known, most of us don’t know beans about insurance. We know that certain forms of it are required, but that’s about it. We need auto insurance if we’re going to drive a car, we need homeowners insurance as long as we still owe money on our homes (and will keep it if we’re smart afterwards). Beyond that, most of us really don’t know a whole lot about our insurance policies.

Unfortunately, when it comes to homeowners insurance, many of us don’t get educated regarding what is or isn’t covered until it’s time to put in a claim. And all too often, what we find out is not exactly good news.

Generally speaking, most homeowners insurance policies will cover you against the following things:

  • Damage to the home from wind, hail, lightning, and other storm related damage.
  • Theft from the premises.
  • Liability for anyone who is injured on the property, as long as the injury was not the result of gross negligence on your part.
  • Damage or destruction of your home due to fire.
  • Loss of possessions (furniture, jewelry, appliances, clothing, etc.) as a result of any of the above.

Perhaps even more important, you should know what your homeowners insurance does NOT cover. While this differs from policy to policy, most homeowners insurance policies do not cover the following, unless the policy states otherwise:

  • Flood and other water damage.
  • Loss of use. In other words, your insurance will pay to replace your home, but your on your own affording new digs while your home is being rebuilt or repaired.

It can be tempting to shop for homeowners insurance like you would shop for most anything else, by simply comparing bottom line prices. Let me assure you, this is not a good idea. Make sure your insurance agent goes over exactly what your policy does and does not cover with you. You should also make sure that you are fully aware of what your deductible will be if you need to make a claim. The last thing you want is to have a major loss and discover that your insurance doesn’t cover the particular type of damage.

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