What Does Homeowners Insurance Covers - 2022

What Does Homeowners Insurance Covers - 2022

When choosing a homeowners insurance policy, it's vital to understand what is covered. Homeowner's insurance companies offer many coverages.

Homeowners insurance is a type of property insurance that covers damage to or destruction of a homeowner's house. Four types of coverage are included in a typical homeowners insurance policy: property, personal belongings, loss of use, and personal liability. Every homeowner's insurance plan is built on the same basic foundation, but policies differ widely in terms of what they include.

The most inexpensive insurance plans are, without a doubt, the most limiting. In many cases, these policies will only cover the structure of your home and provide a minimal amount for personal belongings. More comprehensive plans are available, but they come at a higher price tag.

It is important to read through your policy carefully to understand what isn't covered. Don't hesitate to contact your homeowners insurance companies if you have any questions.

What is Covered by Homeowners Insurance?

Depending on the type of policy you acquire, Texas homeowners insurance coverage can vary significantly. However, as previously said, it usually addresses four key areas: property, personal belongings, loss of use, and personal liability. There are several kinds of coverage inside those categories, depending on the perils covered, the level of coverage, and the situation addressed.

Types of Homeowners Insurance

There are six distinct types of homeowners insurance policies: HO-2, HO-3, HO-4, HO-5, HO-6, and HO-8.

HO-2: This is the most basic type of homeowners insurance policy, and it provides coverage for damage to your home from 11 specific perils, such as fire, theft, and vandalism.

HO-3: The HO-3 is the most frequently chosen option among homeowners. The typical HO-3 policy covers your home and other detached structures on an open-peril basis, which means it will pay for damage caused by almost anything unless the coverage is specifically worded otherwise. It also protects your personal belongings, but on a particular hazard basis. This implies that a loss is only covered if the damage is caused by one of the risks specified in your policy.

HO-4: The HO-4 is specifically for renters. It provides coverage for tenants' personal belongings and offers liability protection. For example, this is a great policy for someone who leases an apartment or house.

HO-5: The HO-5 policy is an upgraded version of the HO-3. It offers all-peril protection on both the structure and personal belongings and loss of use coverage.

HO-6: This policy is specifically for people who own a condo. These policies apply to your personal belongings and the structure of your home.

HO-8: An HO-8 policy form is intended for older homes with a higher replacement cost than the construction value of the property. For that reason, the HO-8 policy form is frequently utilised to protect designated landmarks and architecturally significant buildings.

Dwelling Coverage

  • If your house's structure is damaged, this may help you pay for repairs and rebuilding expenses.
  • Covers losses on the structure of your home caused by specific perils, such as wind, hail, fire, and theft.
  • You can cover detached structures such as garages, fences, and mailbox covers with it.
  • Dwelling coverage reimburses you for the damage to your house caused by specific hazards or perils such as windstorms, lightning, snowstorms, fires, falling objects, and vandalism.
  • If your property is damaged, you will be reimbursed for structures such as sheds, garages, fences, and gazebos unless used for business purposes.

Personal Property Coverage

  • Even if you're away from home, it covers your possessions.
  • Covers the loss or damage of items due to accidents, damage, or theft.
  • On the other hand, personal property coverage covers your belongings from the perils mentioned in your policy, which typically include fires, windstorms, falling objects, explosions, and theft.

One's insurance provider determines the amount of coverage provided for each item, although it is usually around 50% of the coverage chosen for the home's structure. For example, if your home's structure is insured for $100,000, your personal belongings will be insured for $50,000.

This type of coverage also applies to you when you are away from home.

Liability Coverage

  • It covers temporary living expenses if you can't live in your home. These expenses include hotel bills, public transportation, and other situations.
  • Pays for medical expenses if someone is injured on your property.
  • It also includes food, clothing, and shelter costs if you vacate your home due to a covered loss.

Most insurance companies limit how much of the total coverage you select. For instance, a company may cover your home for up to $500,000 but only offer a maximum of $100,000 in liability coverage.

If you rent out part of your home, most loss of use insurance will pay you for the money you would have earned from your tenant while your property is being restored.

Personal Liability Coverage

  • You will be protected in the case of an accident or physical injury caused to someone else while you are staying there.
  • Homeowners' insurance companies in Texas also provide liability coverage if someone is injured on your property and you are found legally responsible. This coverage can help pay for that person's medical expenses and any legal fees that may arise from the incident.
  • Liability coverage usually has a limit, which is the most the insurance company will payout for a single accident.

Liability limits generally start at about $100,000. However, it's important to know your limit in case you ever need to use it.

Read here to know why you need homeowners insurance.

The Bottom Line

Homeowners insurance is a necessary purchase that can provide peace of mind in case of an accident or disaster. When choosing a policy, it is vital to understand the different types of coverage and what each one covers. Then, you can select the right policy for your needs and protect your home and belongings. Talk to your insurance provider agent about the different options available to you and ensure you have the coverage you need in an emergency. In the event of an emergency, homeowners insurance companies in cities of Texas, including Laredo, Lubbock, McAllen, Odessa, and Victoria, can provide you with the coverage you need.