Homeowners insurance coverages are dwelling, personal property, other structures, and liability in case of an incident.
Homeowners Insurance Coverages
1. Dwellings:
Homeowners insurance coverages includes where you live as an individual or with your family and friends. Your dwelling could be permanently fixed, like an apartment or a house. In other cases, it could be mobile, for instance, a residential caravan.
Dwelling coverage will only cover the house you live in. The land on which the house/apartment sits is not covered. In case of a risk of loss, your home insurance will compensate you for rebuilding the house but not the land and other valuables inside your house.
For example, assume floods damage your house. During the flood, there is a possibility of significant sedimentation on your land. When you file your claim successfully, your home insurer will only help you to rebuild your hose. The insurer will not be responsible for paying the costs you will incur to clear unwanted deposited material and soil from your land.
The dwelling coverage will not compensate for furniture and electronics damaged by such floods. The dwelling coverage is strictly interested in the physical structure that accommodates you and your property.
2. Personal Property:
Now assume you have some valuables inside your dwelling. During the risks of loss, two possible outcomes are possible. One, your belonging could get damaged. For instance, your electronics could soak in water beyond repair. In case of fire, they could get burned down wholly or partially.
The second possible outcome you would expect during risks of loss is theft. Take, for instance, your house catches fire. Your neighbours rush to help you put out the fire before it escalates. They break in for more effectiveness in putting out the fire in the process.
Inside your house, someone takes your laptop or a suit you love. In such a case, they have taken these valuables with or without any damages. Thus, they have stolen from your house.
For compensation, whether in case of property damage or theft, your home insurer will compensate you under personal property coverage.
3. Other structures:
This home insurance coverage is for those external structures you have attached to your dwelling. For instance, you could have a wooden perimeter wall to control pet movement. In other cases, you could have a dog kennel close to your dwelling.
In case of an unfortunate fire outbreak that burns even your dog’s kennel, each is compensated differently. Your house will be compensated under dwelling coverage, as explained above. Your dog’s kennel will not be recognized as your dwelling. Instead, it is categorized under other structures.
4. Liability:
Let’s say your house is near to perimeter wall of your neighbour. An unexpected fire broke out, and your neighbour’s fence caught fire. In this case, you are liable for the damage.
Another example could be a visitor who sustains an injury in your house during an incident, say, a neighbour’s child broke their hand.
This liability is transferred to your home insurer through liability cover. This coverage assumes your position to pay for the costs of damage to a third party’s property.
It is a good way to ensure you can handle the incident and liability to a third party comprehensively.
Please Note
For each of these four home insurance covers, know the limit to which your home insurer is liable for your compensation. At times, damages could be beyond what you qualify for compensation.
For instance, the damaged property of your neighbour could exceed the amount you qualify as liability compensation. In such scenarios, you might be forced to pay part of the damage not compensated under liability cover.
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