What Is Homeowners Insurance?
Homeowners insurance is a type of property insurance that covers losses and damages to an individual's residence, along with furnishings and other assets in the home. Homeowners insurance also provides liability coverage against accidents in the home or on the property.
THE STICKING POINTS
Understanding Homeowners Insurance
A homeowners insurance policy usually covers four kinds of incidents on the insured property: interior damage, exterior damage, loss or damage of personal assets/belongings, and injury that occurs while on the property. When a claim is made on any of these incidents, the homeowner will be required to pay a deductible, which is the out-of-pocket costs for you as the insured.
For example, say a claim is made to an insurance company for interior water damage that has occurred in a home. The cost to bring the property back to livable conditions is estimated by a claims adjuster to be $10,000. If the claim is approved, the homeowner is informed of the amount of their deductible $1,000, according to the policy agreement. The insurance company will issue a payment of the excess cost, in this example, $9,000. The higher the deductible on an insurance contract, the lower the monthly or annual premium on a homeowners insurance policy.
Every homeowners’ insurance policy has a liability limit, which determines the amount of protection the insured has should an unfortunate incident occur. The standard limits are usually set at $100,000, but the policyholder can opt for a higher limit. If a claim is made, the liability limit stipulates the percentage of the coverage amount that would go toward replacing or repairing damage to the property structures, personal belongings, and costs to live somewhere else while the property is being repaired.
Acts of God or acts of war, such as earthquakes or floods are typically excluded from standard homeowners’ insurance policies. A homeowner who lives in an area prone to these natural disasters may need to get special coverage to insure their property from floods or earthquakes. However, most basic homeowners’ insurance policies cover events like hurricanes and tornadoes.
Always remember Harleysville Insurance Group will shop around on your behalf to get you the best price available.