When buying a home or an apartment, the homeowners insurance is generally mandatory – even when you doubt that you might need it. Nonetheless, the hefty monthly funds that are paid for coverage could be more beneficial than you could ever have imagined. It’s imperative to not forget that this kind of insurance policy offers important coverage past the building’s structure. There is so much that the homeowners insurance policy can cover and some of them are listed in this guide.

Read along to learn more about what a typical homeowners insurance policy entails and what it covers. 


Considering the Right Amount of Cover

What makes getting the homeowners insurance cover easy is the fact that your mortgage lender will require you to get some level of coverage. However, even when you are not considering a mortgage to acquire a property, you should ensure that your policy, at the very least, covers the cost of replacing your home. This is important as it will ensure you are in a position to rebuild completely in the event your entire home is destroyed.


However, you need to note that the cost of replacing a home is not similar to its market value. Although is often a correlation between these two, the cost of replacement is your primary consideration. This is the case especially if your home has certain upgrade features like the bathrooms and premium kitchen which are not portrayed in the market value with regard to cost.


Because the cost of replacing a home rises over time, your homeowners policy should include protection of inflation. This will make it possible for the amount of coverage to rise depending on the increase in the costs of the building in the area your property is located. You also need to consider contents insurance which will offer reasonable replacement costs for your personal effects. Nevertheless, if you possess some personal effects with a particularly high value like artwork and jewelry, you’ll need to buy additional coverage for that. Just like is the case with auto and medical insurance, homeowners insurance policies also have deductibles. And in any case, your premium will be low when your deductible is high.


What if Your Premium rises if you make a Claim?

When it comes to claims, homeowners insurance is always a better option compared to other kinds of insurance. Generally, when you file the first claim, your premium won’t be increased. Of course, there are exceptions in case your dog bites a neighbor. However, if the claim is due to a natural calamity, your premium won’t be raised.


Nevertheless, it’s possible that your rates may increase in case there are two or more claims within a short period, like 3 years or less. You also need to be aware of the probability of your rates increasing in case the claims in your areas are higher than normal. In this case, the increase will affect the entire market and not you only.


With that in mind, you should not just file a claim to keep the premium low. The greater concern will be a deductible payment. If you have accepted a deductible that is large to keep your premium low, you should ensure there is adequate cash in your emergency fund to cater for the deductible in case you file a claim.

You can follow the following link to view more on the homeowners insurance policy.


What a Typical Homeowners Insurance Policy Covers

Home insurance policy

1) Flatware and Associated Items

It can be surprising to discover that your insurance coves aspects such as dishware and flatware. This may include items such as goldware and gold-plated ware, silverware and silver-plated ware, and platinum items. Examples of these items include tea sets, flatware, hollowware, and trays which are manufactured from the aforementioned materials. The aforementioned items are covered from damage resulting from peril in a manner that is similar to your jewelry. On the other hand, theft coverage on these items will depend on what your insurance policy states. Make sure you go through the policy carefully before you can agree to any terms and conditions stipulated.


2) New Appliances

Covering the entire structure of your house is a clear benefit of the homeowners insurance, but it is important to note that this type of insurance will potentially cover new appliances even when they are installed by you. So, if your neighbor happens to install a new ceiling fan for you and it falls and breaks your window in the process, the damages that occur as a result of such a process will be typically covered by the homeowners insurance policy.


3) Laptops and Cellphones

Since handheld gadgets along with laptops are considered personal effects, these may as well be covered by your insurance policy even when the items get stolen outside your home. All the insured property is often covered worldwide. These items will certainly be covered when lost or damaged, but that must include the peril it which insured against such as theft, fire, and any other aspect. Of course, these will depend on your policy and the deductible (which could be higher compared to the stolen item). Therefore, before you can file a claim, make sure you read and understand the fine print.


4) Family Members Belongings

A lot of homeowners do not realize that their homeowners insurance policy insures relatives who live with them in the same building. Therefore, if you have your elderly parents living in your spare bedroom, or your recently divorced sister staying in the second floor of your building, you need to understand that they are all insured by the policy as well. Always make sure that the limits are sufficient to cover them when such needs arise.


5) Evacuation Process

Another surprising benefit of this kind of policy is the prohibited use coverage that reimburses you (the homeowner) for the damage or expenses that have been incurred during the process of a mandatory evacuation. As a result, this benefit may cover aspects such as food, housing, clothing, and pet boarding.


Final Words

When it comes to the homeowner insurance policy, there is so much benefit you can get. Knowing about deductibles and premiums is crucial to understand what the policy involves. Before you can purchase an insurance policy of this kind, make sure you read the terms and conditions and understand the limits to avoid any surprises when filing a claim.