Understanding Coverages under Homeowner’s Insurance
If you are in the process of buying a house but have no idea how to get homeowner’s insurance, you are at the right place! Like most types of insurance, homeowner’s insurance reduces the costs associated with a risk, in return for a monthly premium, which is based on a lot of things, from your home’s age to its location and more. The associated risk in the case of homeowner’s insurance is the risk of a home being damaged or someone getting injured on the property. Homeowner’s insurance operates through six coverages bundled together.
The first coverage is “dwelling coverage” which protects the structure of the home from theft and pretty much every disaster you can think of, except floods and earthquakes, whose plans need to be purchased separately. In general, dwelling coverage works through a deductible and limit. A deductible is simply the amount of money you must pay per incident before your insurer pays the rest, while a limit is the maximum amount an insurer will pay.
The next three coverages also work through a limit, typically as a percentage of the dwelling coverage. First is “other structures on your property” coverage, which covers things like outhouses and detached garages. The second is “personal property” coverage, which covers the cost of replacing the contents of your home. The third is the “loss of use” coverage, which covers any expenses you incur while your home is uninhabitable, such as staying in a hotel.
The last two coverages operate a bit differently. Their limits are standalone, independent of the dwelling coverage. First is “personal liability coverage”, which protects you against lawsuits filed by those injured on your property. The second is “medical payments coverage”, which covers the medical expenses of those injured on your property who don’t sue you.
We hope you now have a better understanding of coverage under homeowners’ insurance!
Want to get the best home insurance from a top provider in the industry? Contact LinxLinx Brokerage Inc. to make an informed decision!