Everything You Need To Know About Homeowners Insurance

Everything You Need To Know About Homeowners Insurance

If you are a first-time or seasoned home buyer, it’s important to understand the responsibilities that come with owning a home. Most lenders require homeowners insurance to protect the lender in case of an unforeseen loss or covered event. Learn more about what homeowners insurance covers and what it doesn’t, and how to reach out to a respected lender, such as Potempa.

What Does Homeowners Insurance Cover?

Although every policy is different, there are certain similarities to what most homeowners insurance will cover. This includes damage to the inside or outside of your home and liability for personal injury or property damages.

Damage to Your Home

Covered events typically include lightning, vandalism, fire and other circumstances that can damage or destroy your home and belongings. When you purchase homeowners insurance, you ensure that you will have the money necessary to repair or replace your home, if needed. Sheds, detached garages and other structures may require additional coverage.

Personal Belongings

Your policy will probably also cover personal belongings damaged in covered events. Examples of covered items include appliances, clothing, furniture and other valuable possessions. Some policies also offer additional coverage even when you’re not at home. For example, if you have expensive jewelry and wish to take it on a trip, you can include the necessary coverage in your policy.

Per the Insurance Information Institute, providers usually reimburse policyholders for 50% to 70% of the insured amount. In this case, if your take a homeowners policy worth $200,000, you can recover up to $140,000 for your home and belongings.

Of course, if you own designer clothes, expensive art and other extremely valuable items, you might want to purchase an additional rider to expand your coverage.

Personal Liability

It’s important to keep in mind that you are potentially responsible for injuries or property damage that occurs on your property. So, if your pet bites the mailman or your kids launch a baseball through the neighbor’s window, your homeowners insurance would typically cover the cost associated with the injuries or damage. Additionally, if someone slips and falls on your icy sidewalks, most policies will cover you in the event of a lawsuit.

What About Events That Happen Elsewhere?

Many homeowners don’t realize that their insurance also covers events that don’t occur on their property. Known as off-premises liability, this important coverage may reimburse you for up to $100,000, but you can probably extend that up to $300,000. It depends on your budget and the maximum allowed by your insurance carrier. However, higher coverage will probably increase your premiums.

What Homeowners Insurance Doesn’t Cover

While home insurance policies include damages related to natural disasters, there are some exceptions. Earthquakes and flood insurance are usually covered under separate policies, for example. Your local agent can help you understand how to obtain the insurance required by your lender.

Your insurance carrier will expect you to maintain your property. Poor maintenance can lead to accidents that your homeowners insurance will not cover. So, it’s important to repair the roof, replace damaged sidewalks and generally remove hazards that can impact your premiums and financial security.

Contact Potempa with questions related to buying and owning a home. We can explain the best options available to pay for and secure your new home.

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