As a homeowner, you may be familiar with the protection your homeowners insurance policy offers for the structure of your home and its contents. However, you may be surprised to discover the extent to which a standard policy may protect against bodily injury and property damage you or a family member may cause others.
In general, a standard homeowners insurance policy provides coverage in four areas: the structure of your home, your personal belongings, liability claims, and additional living expenses in the event you are temporarily unable to live in your home because of a fire or other insured disaster. The comprehensive personal liability portion of your homeowners policy covers everyone in the family, including pets, against personal injury or property damage to others due to negligence on or off the premises. This coverage may range from $100,000 to $500,000 or more, and it ordinarily includes no-fault coverage for medical expenses as a result of injuries. In the event legal action is taken against you, damages related to covered claims are covered up to your coverage limit and legal fees are typically covered without limit.
For additional liability protection, you may want to consider a personal umbrella policy, which expands the liability coverage you may already have through your homeowners and/or automobile insurance policies, and protects you in some other circumstances, as well. Most umbrella policies offer coverage in $1 million increments.
Weathering a Storm
Basic homeowners insurance policy coverage also protects against certain weather-related disasters. Keep in mind that, to recover in full (up to the coverage limit) for damage resulting from a covered incident, many policies require a dwelling coverage limit of at least 80% of the replacement cost of the home. Here are some natural occurrences that are generally covered by a homeowners insurance policy:
- Wind, Lightning, and Hail. Damage to your home and property caused by winds associated with thunderstorms, tornadoes, and hurricanes; lightning; or hail is generally covered. You may ask, “What happens if one of my trees falls down and damages my neighbor’s house?” In some cases, your homeowners policy may pay to remove the debris and repair any damages the falling tree caused, just as it may pay if your postal carrier were to fall on your icy walkway and become injured. Your policy generally will pay (within specified limits) for losses to your own property, as well as for other losses you might be held liable for.
- If part of your roof were to collapse under the weight of snow, sleet, or ice, your homeowners policy will generally pay for any necessary repairs.
Some weather-related risks or other natural disasters are excluded from coverage. You need to review your policy carefully for these potential hazards under “policy exclusions.” Typical exclusions include the following:
- Flood and Sewer Backup. Most homeowners policies do not cover damages caused by flood or sewer backup; however, you may be able to add sewer backup coverage to your policy by special endorsement.
Flood insurance, in particular, may be required if your home is located within a declared “flood zone.” The only way you can protect your home and belongings from flood damage is with a policy backed by the National Flood Insurance Program (NFIP), a division of the Federal Emergency Management Agency (FEMA). The average flood insurance policy costs approximately $600 per year.
- Earthquakes, Landslides, Mudslides, and Tidal Waves. Natural disasters that occur in coastal areas are excluded from most homeowners policies. These hazards generally affect individuals in only certain geographic areas. Give us a call to see if separate coverage for one or more of these risks is available where you live.
Additional Living Expenses
In the event covered damage to your home prevents you from living there, your homeowners policy will cover your substitute living expenses, such as hotel bills or apartment rent, and restaurant meals. A limit usually applies, equal to a certain percentage of the coverage on your house, but increased coverage may be available at an additional cost. A timeframe for repairs may also apply. To help ensure the reimbursement process goes as smoothly as possible, keep expenses reasonable and save all receipts.
Your homeowners insurance provides important protection for you and your family. Be sure to contact your insurance agent to review your policy or if you have questions.