Homeowners insurance is a lot more complex than most people bargain for. There are all kinds of terms and conditions involved in each individual policy, and it’s important to make sure that you understand them and that you know what’s covered and what’s not. While it can be a little complicated, you can usually fare okay if you understand a few basic principles of homeowner’s insurance.
Most homeowner’s insurance policies are split into two parts, with the first part being property protection. This part of the policy generally protects:
l Your home and all attached structures and parts
l Detached structures, like garages and sheds
l Your personal property, i.e. the contents of your home
l Costs involved in finding a dwelling in the event that you suffer “loss of use,” meaning you cannot live in your home
You can also choose from optional types of property protection, such as:
l Replacement costs coverage if your home needs to be rebuilt
l Inflation protection
l Theft/Burglary protection
l Fraud protection
Needs vary on an individual basis, so really take the time to think about what kind of protection you will need.
Liability protection is a whole different ballgame, and, like property protection, the exact policies and protections you will need will vary based on a wide range of factors.
However, this protection isn’t about protecting the things you own but about protecting you from losing them. If someone is injured on your property and sues, for example, your liability policy would keep you from losing everything to legal fees and judgments
As you can see, there really is a lot to a homeowner’s insurance policy, even a basic one, so it’s always smart to sit down with a knowledgeable insurance agent and talk about your needs before picking a policy.