Do you know what homeowner's insurance covers?
A basic homeowners insurance policy (called HO-1 in insurance lingo) covers your home and possessions if they’re damaged or destroyed by these things:
- Windstorm (unless you live in a hurricane zone)
- Hail (not available everywhere)
- Civil commotion
- Aircraft (and things falling from aircraft)
- Vehicles (and things thrown from vehicles)
- Vandalism (although some policies exclude this)
- Malicious mischief
Upgraded Homeowners Insurance
An upgraded policy (called HO-2) adds protection to your home and possessions from even more perils. You get protection from everything on the HO-1 list (above) plus:
- Falling objects
- The weight of ice, snow, or sleet
- Flooding from your appliances, plumbing, HVAC, or fire-protection sprinkler system
- Damage to electrical parts caused by artificially generated electrical currents (such as a power surge not caused by lightning). But damaged electronics such as computers aren’t covered.
- Glass breakage
- Abrupt collapse (say from termite damage)
That same list applies to the homeowners insurance you buy for a condominium or co-op (except then it’s called HO-6 instead of HO-2).
With HO-1, HO-2, and HO-6, what you see is what you get.
Other Things Homeowners Insurance Covers
In addition to covering your home, homeowners insurance also covers four more things:
1. Your outbuildings, landscaping, and hardscaping. If you have outbuildings, landscaping, or hardscaping, your homeowners policy most likely covers those for up to 10% of your policy amount.
Sometimes policies exclude damage to outbuildings, landscaping, or hardscaping caused by a particular peril (like wind).
2. Damage or loss of your personal belongings. Your homeowners policy covers your family’s belongings, even when you take them out of the house. If your child heads to college with a laptop and it’s stolen, that’s probably covered by your homeowners insurance policy.
A home insurance policy covers a lot of your personal belongings, but not necessarily everything.
Replacement cost means that the insurance company will pay the full cost of replacing an item once you show a receipt. Cash value means the insurance company will issue you a check for the amount that the laptop or sofa would have been worth when it was stolen or destroyed.
3. Temporary living expenses if your home is so damaged you can’t live in it. When you can’t live in your home, your homeowners insurance covers your living expenses, including hotel bills and meals. But, you can’t live in the hotel forever and eat lobster every night on the insurance company’s tab. Your policy will have limits on how long you stay and how much you can spend.
4. Injuries or accidents at your house. Homeowners insurance coverage includes liability – meaning it covers you when you or your family members cause injuries or damage. This coverage also pays when your dog bites someone (medical payments) or someone falls and injures themselves.
Add an umbrella policy to boost your liability coverage into the millions.
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