If you own a home, you probably have homeowners insurance. For most homeowners, this insurance was something that was purchased at the same time as the home, and little thought has gone into it since. This is certainly an area that you want to have adequate protection, because your home is probably one of your greatest assets. But, do you know what your policy actually covers?
Covered Perils
Most policies cover 12 basic named perils:
- Fire
- Lightning
- Wind
- Hail
- Theft
- Aircraft
- Vehicle
- Vandalism
- Smoke
- Explosion
- Volcanic eruption
- Riots
- Exclusions
While the 12 named perils seem to cover most instances of needing to file a claim, most policies usually have 8 exclusions:
- Condemnation
- Earthquakes
- Floods / Water damage
- Neglect
- Intentional loss
- Nuclear hazard
- Power failure
- War
As you can see, there are still some major items that are not covered under a standard policy. Special care should be taken when considering additional coverage for items such as floods and earthquakes.
Property and Liability
When it comes to your property, what is actually covered? In addition to the property itself, what are you liable for if someone is injured on your property? This type of coverage can vary from policy to policy, so examine your coverage carefully. Here are the most common type of coverage you will typically find:
Dwelling and other structures. This coverage covers the replacement cost of your home. If you have additional external structures on your property, you can also make sure that is covered. If you carry a mortgage, typically the lender will require enough coverage to meet the mortgage balance.
Loss of use. If you suffer a loss, this will cover additional costs in the event the property is uninhabitable.
Personal Property. This coverage is typically a set percentage of the building amount. Keep in mind that a standard policy will generally have limited coverage for items such as jewelry, artwork, firearms, and so on. You may want to purchase additional coverage for these items if you want to fully protect against their loss.
Personal liability. When someone takes legal action against you for an injury or other damage done while on your property, the liability coverage will offer some protection. Most policies come with some sort of liability coverage, but this is something you may want to increase.
Medical expenses. In certain cases, if you or your family experience a minor injury on your property , you may have some basic medical coverage. Most of the time this is limited to just a few thousand dollars.
Michael Carter, Realtor Greenville, SC www.beachboyrealestate.com
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