Learn to Speak "Insurance": Homeowners Insurance

Protecting you and your family from significant financial losses caused by forces of nature, theft, or other events is important, and homeowners insurance helps to provide that protection. However, navigating your way through all of the jargon can be difficult. It is important that you have a basic understanding of the vocabulary used by homeowners insurance providers and in policies so that you know exactly what your policy covers.

There are often 5 basic types of coverage for homeowners. There is DWELLING coverage, which only pays for damage to your house and any OUTBUILDINGS (garages, storage sheds, etc.). However, PERSONAL PROPERTY insurance will cover any household items like furniture, clothing, and appliances.

LIABILITY coverage is also important, as it will protect you if you are found legally responsible for another person's injury or property damage. You should assess your worth to know how much coverage you need to purchase.

If someone you know is injured while on your property, MEDICAL PAYMENTS coverage will provide for thosemedical bills. When obtaining this coverage, know what the minimum coverage is, as you may want to purchase more. Also, some medical payment coverage will pay for some injuries that happen away from your home, like if you dog gets loose and bites somebody. Check your policy, though to know what it covers.

LOSS OF USE is another important coverage, as it pays your living expenses if your home is damaged to the point that it is not habitable. Most often policies will pay no more than 20 percent of the amount for which your home is insured, so make sure you read over this coverage closely.

Besides knowing what types of coverage are available, it is also very important to know what is, and is not covered by insurance. Many people are shocked to find out that certain acts of nature are not covered by their general policy, and usually the shock occurs after the incident when it is too late to purchase specialized insurance. Things that are not covered by your policy are considered EXCLUSIONS.

For instance, flooding is often not covered by most policies. Same with earthquakes. If you live in an area that is prone to these types of incidents, then you may have to purchase an additional policy specific to those incidents. However, in some areas, insurance companies may not be willing to provide that coverage.

Other common insurance exclusions include termite infestations and damage; insects, rats, or mice damage; freezing pipes while your home is unoccupied; wind or hail damage to trees and shrubs; losses if your house is vacant for 60 or more days; normal wear and tear; and water damage resulting from continuous and repeated seepage. Be sure to check your policy to be sure of what items are covered.

Items that are covered, but often people do not think would be covered include damaged caused by fire or lightening, aircraft, vehicles, damage from vandalism, theft, explosions, damaged caused by riots, smoke damage, windstorms, hurricanes, hail damage, plus sudden or accidental water damage.

There is a fine line between what is covered and not covered in many policies, so be sure to ask your homeowners insurance provider the specifics regarding your coverage.

Knowing what is covered and not covered by your homeowners insurance is important, but so is understanding that this coverage is not just for people who own houses. There is also RENTERS INSURANCE which covers the property your are renting. It often covers your personal property, offers liability, and loss of use coverage.

CONDOMINIUM INSURANCE will often cover the same things as renters' insurance, but will allso provide for damage to improvements and additions to the condominium unit.

If you own a townhome, you have options when it comes to your insurance. You can opt for and individual policy or an ASSOCIATION MASTER POLICY. This may vary on where you live, so you should check to see if you are able to obtain insurance under the association or if you should purchase your own, individual homeowners insurance policy.

MOBILE HOME INSURANCE covers most mobile homes that are not on wheels and rest on blocks or a permanent foundation. Most of these homes are covered by what is actually an atuo policy that covered mobile homes used as residences. It is sometimes referred to as a MOBILOWNERS policy. These policies, though, offer very limited coverage.

Owning a ranch or a FARM often means you have to get different coverage. You may need to pay extra and obtain different coverage for farming equipment and outbuildings.

Knowing what types of coverage are available and what you will need to obtain is important to be able to get the right homeowners policy for you and your family. Protecting yourself from significant financial losses should something happen to your home is a smart decision, and once you understand the basic terms of homeowners insurance, it makes the process much easier.

Learn to Speak "Insurance": Homeowners Insurance

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