When many people think of their homeowners insurance policy, they think simply of the actual home itself; of the structure whose roof rests over their head each night. But your homeowners insurance policy, when understood properly, is so much more than just simple protection for your dwelling and attached structures. In fact, it contains many different categories of coverage that you may eventually find useful.
- Loss of use: Have you ever considered where you would go if there was a fire in your home that made it uninhabitable until repairs were completed? And who would pay for the temporary dwelling you must inhabit? Your homeowners policy, if it has loss of use coverage, would pay for the hotel, apartment or other suitable dwelling you need to run to for safety after an insurable event.
- Liability: Sure, a pool party sounds like a lot of fun, but you never know whether or not one of your guests might get hurt during a backyard brouhaha. And it isn’t just parties that keep you exposed to injury liability—a neighbor tripping on your walkway or a stray branch falling on someone’s car can also result in a costly claim against you. Your homeowners insurance liability portion can protect your personal finances against these claims.
- Other structures: The dwelling coverage on your homeowners insurance policy covers your home and any attached structures—but what about your detached structures like sheds, guest houses, greenhouses and detached garages? The other structures coverage in your homeowners insurance policy covers each of these structures within limits. Make sure you read your policy for a full understanding.
- Contents: All of the items inside your home—your computers, furniture, clothes, and pricey electronics—would be expensive to replace if they were damaged in a fire, theft, hurricane or other covered peril. The contents coverage in your homeowners insurance policy will either give you actual cash value for the items (meaning that they will pay you what your item was worth, including depreciation) or replacement value so that you can buy a new, replacement version of the damaged items.
- Endorsements: While endorsements are not automatically included in all policies, they can be included to cover expensive items you own that might not be covered under contents. For instance, you can get special endorsements to cover expensive art, jewelry, antiques and even furs. Remember, in order to get a special endorsement to cover your more valuable possessions, you must speak with your agent.
If you are unsure of all the different items your homeowners insurance protects, see if your agent can meet with you and go over the policy. After all, if you don’t know what coverage you are paying for you just might miss out on the opportunity to use your policy to make you whole after an insurable incident.