|Homeowners insurance, also referred to as home insurance or property insurance, provides coverage for your private home and compensates you in the event of a loss. If your home is burglarized or is partially or totally destroyed by a cause that is covered by your policy, homeowners insurance will help you replace your belongings, repair your home, or even rebuild.
Homeowners insurance also provides liability coverage which protects you, the homeowner, in the event that someone is injured on your property or you are deemed responsible for personal injury or property damage through negligence. The amount of compensation you receive in a claim, or that the claimant receives from your insurance company when filing a liability claim against you, depends on the limits of your policy.
What does Homeowners Insurance cover?
Homeowners insurance provides coverage for a range of risks that you may face as a homeowner that otherwise can be financially challenging to cover out of pocket. These include:
Coverage A - Dwelling: Damage and destruction to your residence and/or detached structures. You will receive compensation, up to the limits of your policy, if your house or storage shed is damaged due to a covered hazard. Standard covered circumstances include things like fire and vandalism, but other hazards such as earthquakes and floods are excluded.
Coverage B - Other Structures: Any structure that is not connected to your house is covered
Coverage C - Personal Property: Damage or theft of personal property, up to your policy limits for covered circumstances.
Coverage E - Personal Liability: If you, your family member, or even your pet causes an accident, injury or property damage, your homeowners insurance can protect you. Whether the issue requires medical care or repair of property, you will typically have coverage up to your liability limits.
Coverage D - Loss of Use: If your house is uninhabitable, your homeowners insurance can pay for alternative living arrangements while your home is repaired or rebuilt.
What about Townhouses?
If you own a townhouse, you can insure it with a homeowners insurance policy or an association master policy. Some townhouse associations have master policies, in which case you should purchase a tenant homeowners insurance policy to insure your personal property. Other townhouse associations do not have master policies, which is when you should purchase a homeowners insurance policy for your unit.
What is Renters Insurance?
Renters insurance coverage protects you and your personal belongings when the worst happens. While you may only be renting your apartment or house, chances are you own most of the stuff in it. While your landlord’s insurance policy on the home typically covers the building structure itself, protecting your valuables comes down to you.