Getting familiar with your home insurance policy is a smart move and could help you out in the future.
Compare learning about your homeowners coverage to meeting the neighbors next door. You’ll never know that they have a boat and love company on it if you don’t strike up a conversation, and you don’t always know how home insurance can benefit you unless you read the fine print.
To break the ice, here are some of the home insurance basics:
When you are getting to know your policy, one of the most important things you should look at is coverage. You want to be well-versed in how each component typically included in a standard policy protects your home so you can understand the perils that are – and aren’t – addressed by your coverage. Keep in mind that protection can vary from policy to policy so you should get familiar with yours.
In the meantime, here are some examples of standard home insurance protections:
- Dwelling Coverage – Protects the structure of your home from covered perils. In insurance, a peril is an exposure to an event that may cause damage to your home. Homeowners insurance covers the most common perils such as fire, wind, and lightning. However, there are other perils that you may want coverage for that are usually not covered under a traditional homeowners insurance policy such as floods, earthquakes, and mudslides.
- Other Structures Coverage – Pays for damage to detached garages and sheds on your property caused by covered perils.
- Contents Coverage – Provides protection for your personal belongings in your home if they are damaged, stolen, or destroyed in a covered peril. This may include furniture, appliances, electronics, etc.
- Loss of Use Coverage – In the event your home becomes uninhabitable due to a covered peril, your homeowners insurance helps cover the cost of shelter, dining, etc.
- Personal Liability Protection – Helps if someone is injured on your property and it’s your fault and the injured party decides to sue. It can help pay legal costs and any award in the case, up to your coverage limits.
- Medical Payments Coverage – Provides help paying the medical bills of someone who is injured on your property and does not file a lawsuit.
Maintaining your policy
If you want to get the most out of your home insurance policy, then you need to maintain it.
What does that mean exactly? Each year, at your policy’s renewal time, it’s a smart idea to go over your policy as a refresher. Did you recently make any home improvements that could affect your coverage? Do you need to increase your contents coverage? Now is a good time to re-evaluate these areas. Keeping an active home inventory – a list, complete with photos and receipts, of everything you own – is a good way to keep up with the value of the contents in your home.
Before renewing, you also may want to shop around for a better price. Insurance experts recommend that homeowners shop for their policies annually, even if you end up staying with your current insurer.
In the event of a claim
One thing that every homeowner should know is what to do in the event of a claim. It never hurts to simply call your insurance company and ask questions about how to proceed. Generally, it’s a good idea to document the claim. For example, if there’s property damage, take photos. Proof of the damage will be helpful when you do file.
Once you are ready to file the claim, again, get in touch with your insurance company. Some companies even allow you to file claims online or through a mobile app. Make sure you do research on the claims process before choosing a provider.
Flood insurance: yes or no?
If your home is in a high-risk flood plain, your lender will require you to purchase flood insurance. If your home is not in a high-risk zone, you’ll have the choice of whether or not to purchase a separate flood policy. Keep in mind that if a flood does affect your home, you won’t have any coverage without a separate flood policy; flooding is not covered by standard home insurance.
To get more information about flood insurance, you can visit www.floodsmart.gov.
Once you’re familiar with your home insurance coverage, you’ll know when to call on it. You’ll sleep better knowing that help is available.
Samantha Alexander from HomeInsurance.com contributed to this story. HomeInsurance.com is a national insurance marketplace where homeowners can compare rates from leading U.S insurance carriers.
Please visit their website to learn more.