Homeowners Insurance: What Is and Is NOT Covered?

what does homeowners insurance cover?
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Your homeowners insurance will cover the cost to rebuild your house or repair damages caused by covered events. You can purchase additional coverage for threats that are not already covered, such as floods and earthquakes, and you can purchase coverage for valuable possessions or the full replacement cost for your belongings.

Policies will vary. To learn more about homeowners insurance and make sure you get a great rate, speak with the team of home insurance experts at Malhotra & Assoc. Insurance. We take care to bring you the coverage you need at the price you deserve.

Homeowners Insurance Coverage Basics

Homeowners insurance is critical to protect your property investment in the event your house is damaged or destroyed or to protect you from liability if someone gets injured on your property. 

The basics of homeowners insurance protect you by paying for the costs to repair or rebuild your house. These costs are based on the manual labor and material costs to build a structure like your existing home, not necessarily the market value of your house, which takes into account the value of the land your house sits on.

What Is Not Covered Under Homeowners Insurance?

Unless you purchase additional coverage, you will find that you are not guaranteed the full replacement value of your home and belongings. You are not covered from damage due to natural disasters such as windstorms, earthquakes, or floods unless you add coverage that names those dangers specifically. Any threat not listed on your policy should be assumed not to be covered. You may be required to purchase flood insurance if you live in an area with a high flood risk.

You should also note that even though you have coverage, you will need to pay a deductible. This is part of cost-sharing. Once you have paid the deductible, your insurance company will pay what they have agreed to.

What are the Types of Homeowners Insurance Coverage?

You can purchase a few different types of homeowners insurance coverage. These options include dwelling, other structures, personal property, additional living expenses, liability, and medical payments.

Dwelling covers damage to the home and covers enough to rebuild the home. It also covers attached structures, such as your deck or porch. If your house is destroyed in a fire, for instance, your dwelling coverage will cover the cost to rebuild your home. This coverage will not be the market value of your home, but rather the pure construction costs to rebuild a home of your size with its existing features. You can get a rough estimate by calculating the cost to rebuild with local construction, material, and labor costs and your home’s square footage.

Other structures cover stand-alone structures on your property, at 10% of dwelling coverage. Personal property covers the cost to repair or replace belongings, at 50 to 70% of dwelling coverage. Additional living expenses help pay for temporary living expenses if your home is being repaired, at 20% of dwelling coverage. Liability pays for injury or damage you cause, at $100,000 to $500,000. Medical payments pay for injury on your property, regardless of fault, at $1,000 to $5,000.

What are Home Insurance Riders?

You also have the option to add coverage for earthquake, flood, or windstorm damage, replacement cost coverage, or extended or guaranteed replacement cost coverage. Guaranteed replacement pays for the full cost, while the regular replacement cost coverage pays up to a specified limit.

Additional coverage for your personal property can fall under this category. Coverage for these items will not exceed the coverage limit for your dwelling.

For more information about homeowners insurance, give the experts at Malhotra & Assoc. Insurance a call today!

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