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There is nothing worse than coming home and finding out your pipes burst and left the first floor of your home looking like Lake Erie. Well, maybe finding out your homeowners insurance doesn’t cover it. For that claim, you are probably safe, but what about others? Do you even know what a standard homeowners insurance policy covers… and doesn’t cover?
Our friends at the Insurance Information Institute put together a list of basic items usually covered by homeowners insurance.
- Coverage for the structure of your home.
This part of your policy pays to repair or rebuild your home if it is damaged or destroyed by fire, hurricane, hail, lightning or other disaster listed in your policy. It will not pay for damage caused by a flood, earthquake or routine wear and tear. When purchasing coverage for the structure of your home, it is important to buy enough to rebuild your home.
- Coverage for your personal belongings.
Your furniture, clothes, sports equipment and other personal items are covered if they are stolen or destroyed by fire, hurricane or other insured disaster. Most companies provide coverage for 50% to 70% of the amount of insurance you have on the structure of your home. So if you have $100,000 worth of insurance on the structure of your home, you would have between $50,000 to $70,000 worth of coverage for your belongings. The best way to determine if this is enough coverage is to conduct a home inventory.
- Liability protection.
Liability covers you against lawsuits for bodily injury or property damage that you or family members cause to other people. It also pays for damage caused by your pets. So, if your son, daughter or dog accidentally ruins your neighbor’s expensive rug, you are covered. However, if they destroy your rug, you are not covered.
- Additional Living Expenses
Additional living expenses in the event you are temporarily unable to live in your home because of a fire or other insured disaster. Keep in mind that the ALE coverage in your homeowners policy has limits, usually a percentage of the amount of coverage you have on your home, and some policies include a time limitation.
However, you should be aware of policy exclusions. Remember that insurers require special policies for some risks. Most basic policies exclude claims for earthquakes, floods and landslides. You may need to buy add-on policies to bridge any gaps in protection caused by the exclusions.
Check with your insurance professional to make sure you are covered for what you think you are, and look at additional insurance protection for what you are not.