Homeowners Insurance 101: Do You Know What Your Policy Covers

If you’ve ever had to file a claim with your homeowners insurance company, then you know that these plans can be confusing.

Every new concern raises the question, “Is that covered?” The answer is often a contingent one because what damages insurance companies pay for typically depends on several factors.

So, how should you navigate this process?

For homeowners worried about filing a claim, then, or those who are just shopping around for an insurance policy, the most important thing to understand about your policy is this: the worst thing that can happen when you file a claim is that the insurance company can deny it.

That’s not a disaster, even if it may be inconvenient.

By reviewing your policy for these 3 elements, though, you can get a clearer sense of what you’re really responsible for, and what claims you can expect your home insurance company to help with.

Begin With The Building

At its core, home insurance policies are designed to protect your home, often referred to in policies as your dwelling.

That means most homeowners insurance policies cover various kinds of structural damage, such as fires, frozen pipes, and water damage from appliances.

Be sure to read your policy carefully, though, in case there are any exclusions.

Some types of weather-related damage may be excluded, particularly flooding, and policies are unique, drawn up based on your specific location and property details.

What Belongs To You

Another major feature of home insurance policies is that they are designed to cover your personal property in the event of theft or damage caused by structural issues – for example, if your couch is ruined because of a burst pipe.

However, your home insurance policy may exclude certain items, such as jewelry or expensive technology, from basic coverage, or only cover such items up to a certain amount.

Luckily, in many cases, if you want more coverage, insurance companies offer a range of policies, allowing you to add coverage to meet your needs.

A Matter Of Liability

When we talk about home insurance policies, we often focus on property damage or theft, but there’s one other major area these policies typically cover, and that’s injury claims.

If a visitor is injured on your property, and specifically if they are injured by a problem with your home, then you may be considered liable for their medical expenses.

Your insurance’s liability coverage is typically limited, and many experts recommend supplementing it with an additional umbrella policy, so that you have greater protection in the event of a serious accident, but that is up to the individual homeowner’s discretion.

Focus On Exclusions

Ultimately, it’s not possible to perfectly predict your home insurance policy’s responses to your claims, but it’s fairly easy to know what they won’t cover.

If you read your policy carefully, focusing on what your insurance provider specifically notes as exclusions, that will provide you with a clear sense of where you need to take extra precautions, or pursue additional coverage.

When it comes to exclusions, you won’t have any recourse or right to appeal, so familiarize yourself with that part of the policy.

Beyond that, all you can do is proceed with caution, take good care of your home, and place your trust in your insurance company to do the right thing.