Home insurance is a must for anyone living in a house. Homeowner's insurance is designed to protect a residence from a variety of accidents or natural disasters. Most homeowner's insurance policies offer a variety of options that protect everything from the building structure itself to your prized collection of presidential autographs or your furniture and belongings. Home insurance can be broken down into different components, depending on need.
Replacement Cost
Homeowner's insurance offers a replacement cost of your home in the event it is damaged or destroyed by accidents such as fires, or by natural disasters (check with your local agent in your area for verification of what is covered) such as earthquakes, tornadoes or general wind damage. Replacement cost is determined not only by the size of your home, but also its age and design (ranch, two-story, Tudor-style and so forth). Most policies cover damage caused by water (not flooding) as well as hail and explosions (faulty gas lines) or other reasons for loss of property.
Consumers may also want to check into extended replacement costs to take into consideration inflation and the cost of construction or rebuilding costs at some future point in time. This type of insurance may cover as much as 20 percent over the current replacement cost limitations on your policy.
Liability
A homeowner's policy may also protect the homeowner against lawsuit or liability in the event someone who visits your home or property is injured there. For example, if someone comes onto your property for whatever reason and falls or trips or is otherwise injured, you will be protected from damages up to the values you have determined for your policy coverage. Minimum liability coverage often starts at $100,000.
Liability insurance may offer medical payments of various amounts determined by the homeowner for protection against medical cost lawsuits as well.
Personal Belongings
Homeowner's policies also offer consumers replacement costs or actual cash value coverage options for personal belongings inside the home or on the property at the time of accident or loss, e.g. furniture, appliances and clothing. Personal property coverage is often offered at a minimum of $10,000, but these minimum coverages vary by state.
Floaters
Floaters or endorsements are additional additions to a homeowner's insurance policy that cover specific items, such as jewelry, collectibles antiques or any other property or belonging that may be considered irreplaceable or expensive to replace, such as computer or office equipment. The floater offers extra compensation for such items that goes beyond the basic compensation offered in the replacement coverage estimations of the policy.
Deductibles
Most insurance policies come with a deductible, which is the amount of money a homeowner has to pay out of her own pocket before insurance coverage kicks in. Your deductible may also determine your monthly premium payments. For example, the higher the deductible, the lower monthly premiums are. However, homeowners are cautioned to determine if their deductibles will be easily met in the event of an accident or other incident that requires a claim, to reduce wait time for replacement or rebuilding coverage to be paid out.
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