Home insurance explained

Congratulations! You are about to become a full-fledged homeowner. Before you let the lengthy home buying process go by and start basking in the early moments of home ownership, make sure you’re on top of the home insurance process.

After you put so much time, effort and money into buying your new home, you want to make sure your home has the right coverage it needs.

Of course, you’re probably not even sure about the kind of varying coverage you need.

While there is standard home insurance, every home and homeowner has individual risks that need to be addressed. And while insurance can seem like a tricky process, it’s easier to understand if it’s considered piece by piece coverage.

The insurance people list six main types of cover so that even a layman can understand the information.

The six essential types of homeowners insurance

1. Your Home Coverage: This cover protects you from damage to the actual premises of your home. If there is covered damage – caused, for example, as a result of fire, storm, theft and/or vandalism – you will be reimbursed for repair or refurbishment work up to the border. To assess your coverage needs in this regard, you and your insurance specialist can estimate how much it would cost to remodel your home. In addition, if the home is mortgaged, your lender will require explicit types of coverage, as well as specified limits and deductibles.

2. Your other structures: Any detached garage or similar, such as sheds or fences, is protected under this cover. Coverage is generally up to 10% of the insurance amount for your home, but you can apply for wider coverage if you feel you need it.

3. Your personal belongings: This aspect of insurance protects you against damage or losses related to your personal belongings. This includes furniture, sports equipment, computer systems, kitchen equipment and so on. A standard policy will cover the actual cash value, but if you think it’s better to opt for replacement cost, you can go for it. The limits and deductibles set out in the policy apply to both types of cover.

4. Your Loss of Use Coverage: If your home is so damaged by a covered risk that you can’t live in it while it’s under repair or remodeling, this type of cover will pay for your temporary living expenses.

5. Personal Liability: This coverage protects you from a lawsuit if you or other household members injure or damage someone else’s property.

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6. Medical Expenses: This type of coverage covers the medical expenses of the injured on your property.