What is Homeowners Insurance?

Homeowners insurance, also referred to as “hazard insurance”, provides coverage to repair your home if it is damaged. It also covers items inside the home, such as artwork and furniture, and provides health coverage if someone other than yourself is injured while on your property. Buildings on your property, such as a separate garage, barn, or shed, is also protected by most hazard insurance plans. If you have expensive artwork or collectibles worth more than standard coverage allowances, you may need to get a separate insurance policy to cover them.

Flood and Earthquake damage are not included in most standard insurance policies. Those are additional or separate depending on your location.

How does Homeowners Insurance Work?

When your home is damaged, you will first have to file a claim with your insurance company. They will send an adjuster to inspect the damage and provide the estimated cost to repair the damage. Your insurance company sends you a check, minus your deductible, to cover the costs of repair.

  • Structure of the Home

    The home structure is covered if damaged by fire, hail, or other disasters listed in your policy. Detached structures such as sheds and garages are also covered by standard homeowners insurance. Standard policies don’t cover earthquakes, floods, or normal wear and tear.

    Personal Belongings 

    Items inside the home such as furniture, art, clothes are covered if stolen or destroyed in your property. Expensive items like art, jewelry, and collectibles are covered but only up to the standard limits.

    Car Coverage

    If your car is broken into or stolen from your property, it will be covered by your homeowner’s policy. If you’re backing out of your garage and instead of putting it in reverse, you drive through your house. Insurance will cover the cost of repairing your home but won’t cover damage to the car itself.

    Liability 

    If someone that does not live in the property ever sues you because they were hurt on your property, you are covered. Liability covers the cost of defending you in court, plus the cost of any awards. The standard liability insurance coverage is $100,000. If you want more liability protection, you should speak to your insurance company about your coverage limits and how to increase them.

    Additional Living Expenses 

    If you cannot live at home due to damage, ALE will pay hotel costs and other living expenses incurred while the home is being repaired. You will be reimbursed for any missed rental payments if you rent out a portion of your home.

  • Earthquakes and Water Damage

    Most states do not include coverage for flooding and earthquakes due to vast demographics. Coverage for earthquakes is extra in every state except for California. Flood insurance is only available through the government-run National Flood Insurance Program. Other forms of natural disasters may or may not be covered depending on the location of the home.

    Maintenance Issues

    Not taking proper care of your property can cause certain issues not to be covered. Damage for general wear and tear is not covered.

    Normal Wear and Tear

    Damage from termites, birds, rodents and rust, mold, and wear and tear items isn’t covered. Defective items in the house are usually excluded from coverage.

    Massively Destructive Events

    These are Acts of war and nuclear accidents are usually not covered by standard homeowners insurance policies. You may be able to purchase coverage for an additional premium.