If you ever had to file a claim on your homeowner’s insurance you know how important it is to have an insurance agent that will answer their phone and not just throw you to the circus of customer service.
Your home is probably one of the largest purchases you’ll make in your life. With so much money invested, you want to make sure you protect your home.
What is in a homeowners insurance policy?
Your homeowners insurance coverage defends you against certain perils, which are events that can cause loss or damage to your home or belongings. Your policy kicks in when any of these perils occur, helping you do things like rebuild your house and replace your belongings.
Most home insurance policies protect against perils such as:
- Fire and smoke
- Riots/civil unrest
- Damages caused by cars and aircrafts
- Falling objects
- Damage caused by the weight of ice or snow
- Floods & Earthquakes are a separate policy not included in your homeowner’s insurance policy
- Volcanic eruption
What types of coverage are included in homeowners insurance?
- Dwelling coverage: This is the protection for the structure of your house. If it gets damaged or destroyed by a covered peril, your policy pays for repairs or the cost of rebuilding up to your policy limits.
- Other structure coverage: This operates just like dwelling coverage, but it protects other structures on your property like garages, sheds and barns.
- Personal property coverage: This portion of your policy safeguards everything you store in your home including clothes, furniture and electronics. Your policy will only pay out up to your policy limits, review your limits to ensure you get adequate coverage. You may want to consider a Personal Articles Floater for more valuable items.
- Loss-of-use coverage: This references the additional living expenses portion of your policy. When you get displaced from your home by a covered peril, your homeowners insurance coverage can help with hotel costs and restaurant bills while you’re waiting for your home to be repaired.
- Personal liability coverage: This portion of your policy covers legal fees and any settlements if you or one of your family members gets sued for causing bodily harm or property damage. It also protects you if your pet causes a problem and someone takes you to court over it (although aggressive breeds may not qualify for this protection).
- Medical payments coverage: If someone gets hurt on your property — for example, neighbor slips on your icy front doorstep — this part of your homeowners insurance policy covers medical expenses.
The usual policy limits for each coverage are as follows:
- Dwelling and other structures coverage: The limits on this portion of the policy varies and you have control over how much coverage you choose in this area. Consider if you’d want to rebuild your house or other structures using newer materials and if you’d have to make changes to bring your house up to code. Speak with your Arena Agent about increased coverage.
- Personal property coverage: Personal property coverage can equal between 50 and 70 percent of your dwelling coverage limit. Conducting a home inventory can help you determine if you want to increase this policy limit. Your policy probably has a cap on coverage for single items. If that cap is at $2,000 and you have art, jewelry, electronics or sports equipment worth more than that, ask your agent about adding a rider (also called an endorsement) to your policy to specifically increase limits for those high-value items.
- Loss-of-use coverage: Some policies offer unlimited coverage in this area but only for a set time while others cap the amount they’ll pay out each week or month but protect you in perpetuity.
- Personal liability and medical payments: Most policies start with a $100,000 limit for this coverage, but you have the option to increase that limit if you feel like you’re exposed to more risk. It is recommended to get a separate umbrella policy to offer yourself and your family more liability protection.
What is a homeowners insurance deductible?
A deductible is a flat rate you pay your home insurance company when you need your policy to pay out after a loss (a covered peril). Most people choose a deductible between $500 and $2,000. The higher your deductible, the lower your premiums (the amount you pay for your policy each year) will be.
Keep your deductible at a level you can comfortably cover as a one-time unexpected expense. You don’t want a $2,000 deductible to stand between you and your policy paying out when you need it most.
What does homeowners insurance not cover?
Most homeowners insurance will not protect you against:
Earth movements, e.g., earthquakes, mudslides and sinkholes
Damage from neglected maintenance
Dog attacks if you own an aggressive breed
When obtaining homeowners insurance, consider some of these factors:
- Air conditioning units
- Large trees that would need to be professionally removed if they fell over
Your homeowners insurance coverage is designed to safeguard the investment you’ve made in your home and all of the belongings you store in it.
It is important to have a comprehensive discussion with your Arena agent to make sure your getting the right level of protection.
Protecting your family's investment