Understanding homeowners insurance
First-time homeowners are faced with many realities of being “an adult,” and one of the things that comes with owning a new home is making sure you have proper insurance. But not all insurances are the same.
Just because you have insurance on your home doesn’t mean you’re protected from everything that could happen. In fact, often with homeowner policies, there are some very common occurrences that might not be covered.
Homeowners insurance differs from state to state, so to avoid making costly assumptions, it’s important to understand what’s included with your policy.
Typically, a policy will cover the actual dwelling and some of the other structures on the property, such as a fence, garage, patio or driveway. Personal property is usually covered as well. This includes the contents inside the home, although you may need to pay a bit more in premiums for high-value items like jewelry or paintings. You’ll want to make sure this is covered in your policy.
Homeowners insurance policies typically include coverage for injuries sustained on your property where you are liable. So, if someone slips on your driveway or falls while doing repairs to the roof, you’re covered. However, this coverage is usually limited to a certain dollar value, so you need to know how much coverage you have and exactly what’s included.
Natural disasters are the one area that can cause some problems, as not everything is covered and you often have to buy separate flood, hurricane or earthquake insurance—especially if you are in an area that is highly susceptible to these disasters. You also may be able to lower premiums by better protecting yourself against damage, such as adding storm shutters, reinforcing your roof or buying stronger roofing materials.
If items are stolen from your vehicle while it sits on your property, that may or may not be covered by your insurance. Normally, this is covered by auto insurance but there are some homeowner policies that will include these items, so it’s good to know if yours will.
Many first-time buyers think they need insurance to cover the entire cost of the house, but the land under your house isn’t at risk from theft, windstorm, fire or other perils covered in your homeowners policy, so it’s not necessary to include these when deciding how much insurance you should buy. Talk with your REALTOR® and determine the best number so you have enough coverage but not too much, and that you’re not paying premiums for what you don’t need.