A standard homeowners insurance policy covers damage to a house and its contents in many circumstances, but not all. Perils that are typically covered include fire, lightning, water damage, wind, fallen objects, damage caused by a vehicle or aircraft, theft, vandalism, explosions and damage caused by the weight of ice, snow or sleet. Other perils, such as earthquakes and floods, are often excluded from a standard homeowners insurance policy.
Coverage for Additional Perils
If your home is located in an area where there is a significant risk of a peril that isn’t covered by a standard policy, you may be able to buy extra insurance to cover that peril. The types of optional coverage available depend on state laws and each insurance company’s offerings. With extended coverage, you won’t have to worry about suffering major damage or a total loss and not receiving any compensation.
Insurance Coverage for Other Structures
Homeowners insurance covers damage to a principal dwelling, but it may not automatically cover damage to another structure on the property, such as a detached garage or shed. If your policy doesn’t cover those structures, you can purchase extra coverage so you won’t have to pay for expensive repairs if, for example, a tree falls on your garage.
Protection for Valuables
A standard homeowners insurance policy will cover the contents of your home if they are damaged or destroyed by a covered peril, but the total amount of coverage will be limited. If you own expensive electronics, jewelry, artwork, antiques or other valuables, you may need to purchase extended coverage to protect them.
Coverage for Sewer Problems
Damage resulting from a sewer system failure can be expensive to clean up and repair. Some insurance companies offer extended coverage for sewer backups. You might want to purchase that coverage if your neighborhood has an older sewer system.
Inflation Protection
A homeowners insurance policy typically provides a set amount of coverage in the event of a loss. If that amount isn’t adjusted for inflation and your house suffers catastrophic damage, you may not receive enough money to repair or rebuild it. With an optional inflation guard endorsement, your coverage limits will be adjusted each year to account for inflation.
Do You Have All the Homeowners Insurance Coverage You Need?
Making sure you have the right forms of homeowners insurance coverage and high enough limits is essential. If you don’t and you suffer a loss, you may find yourself with a house that you can’t live in and can’t afford to repair. Read through your homeowners insurance policy so you understand what is covered and what is excluded. Consider any risks specific to your location and contact your insurance company or agent to discuss any questions or concerns you may have.
