Home insurance

Home insurance is commonly referred to as the homeowner’s insurance (HOI). It’s the type of property insurance coverage that covers the private residence. This insurance policy combines a variety of personal insurance coverage, that includes losses that might occur in a person’s home, additional living expenses, contents of the home and liability coverage for accidents which might occur at the covered home. Many standard home insurance policies consists of 4 types of coverage, namely, coverage for the home structure, coverage for personal belongings, coverage for the extra living expenses and liability protection.

Types of Home insurance

Since every home is unique, you should choose the home insurance policy that perfectly fits your home. Some of the common types of home insurance include;

Coverage for the home structure

This home insurance policy pays for the costs of rebuilding or repairing your home in case it’s destroyed or damaged by hurricane, lightning, hail and other disasters or fire. In addition, most types of home insurance policies covers for the detached structures like tool shed, gazebo or garage. The standard policy does not cover for the damage that is caused by earthquake, routine wear& tear and flood.

Coverage for personal belongings

This policy covers for various personal items like clothes, furniture or sport equipments if they’re stolen or damaged/ destroyed by hurricane, fire and other covered disasters. Generally, this policy covers for about 50-70% of the house structure insurance coverage. This coverage includes the items that are stored off the premises, meaning you’re covered in any place of the world.

Liability protection

The liability protection policy offers coverage against the lawsuits for property damage or bodily damage that you or members of your family might cause to another person. In addition, the policy covers for any damage that your pet might cause to another person. Therefore, when you have purchased this policy and your dog or child ruins the expensive rug of your neighbor by accident, you’re covered. The liability part of the policy pays for legal costs of your defense in a court of law as well as the court awards up to the minimum amount that has been stated on the policy. In addition, this policy offers no fault medical cover. This simply means that when your neighbor or friend is injured while in your home, they can just submit their medical bills to the insurance company. The expenses will therefore be covered without you being filed with the liability claim. However, you should bear in mind that this policy doesn’t cover your pet or family members.

ALE (additional living expense)

This policy pays for additional living costs away from your home when you can’t live there because of the damage that was caused by the covered disaster. This policy covers the restaurant meals, hotel bills as well as other costs beyond your common living expenses that are incurred when the home is being repaired or rebuilt.

You should bear in mind that this coverage in home insurance policy has certain limits and some of the policies include time limitation. Nevertheless, the limits are separated from the amount of repairing or rebuilding your home. Even when one uses up the additional living expense, the insurance firm still pays for the entire cost of rebuilding the house up to the limit of the policy. Additionally, when one rents out part of the house, the ALE policy pays for rent that one would have gathered from the tenant if the house wasn’t destroyed.