Home Insurance Basics – What are you paying for?

Like most homeowners you probably don’t know what you are really paying for when you get home insurance. Obviously it covers the home against fire, theft and other loses but there are many other features of the policy that can be useful. If you are going to pay hundreds of dollars each year you should know what you are getting.

Even though policies vary from company to company they all have similar coverage options. Here are a few basic coverage’s that most people are unaware exist:

Personal Liability

In the event someone is injured on your property you can be legally liable for their injury. This could include a neighbor slipping on ice or the mailman tripping on a bike.  It will also cover you if you or your family member causes damage to others property.  The basic coverage starts at $100,000 but most people should increase that limit to $500,000 as it only costs a few more dollars and covers much more.

Loss Assessment

This type of coverage is designed for condo or townhouse owners who have an association.  The coverage can be used to pay for your share of property damage or injury awards for which your homeowners association’s policy does not cover.  Most policies include $1,500 for assessments but can increase to $50,000 depending on the association.

Other Structures

Beyond your home you probably have other structures such as a detached garage or shed.  The standard dwelling coverage on your homeowners insurance does not cover these items but this is another coverage that comes with most policies.  Other structures coverage is usually 10% of the dwelling coverage on a standard policy.  If you have an elaborate shed or garage that is not connected to the house consider increasing this coverage amount.

So now you know a few more things that are covered on your homeowner’s policy but what company do you go with?  When you pay for an insurance policy you never really get anything from it until it comes time to file a claim.  Having a responsive and professional insurance agent will make any claim much easier to handle.  When you pay hundreds of dollars for your next home insurance policy make sure you have a good agent.