Whether you are buying a home or just want to review your current policy, the terminology used in homeowner’s insurance can be confusing. Add in extra coverage and exclusions, and it is hard to know what,e exactly is covered and for how much. Use this guide to better understand where you stand with regard to homeowner’s insurance.
- Liability Coverage
This is an important part of your policy. It protects you against claims made if someone is injured on your property, whether that’s a visiting friend or a neighborhood kid who wandered into the backyard while you were at work. It can also protect you from liability if a family member or pet causes damage or injury to someone else or their property. Be sure you set the limits at a suitable amount based on your personal financial situation.
- Structure and Property Damage
This is the part most people think of when they hear about homeowner’s insurance. It pays to repair or replace damage to your home, outbuildings, and personal property that is caused by covered events.
There are several ways to structure property damage limits, with the most common being full replacement value. This ensures that you can rebuild after a total loss, even if construction costs have increased above your stated policy limit. Regardless of the amount of coverage you have, you are responsible for the first portion of repair costs up to your deductible.
- Exclusions and Extra Coverages
There is a pretty good chance that your policy contains a few exclusions. Damage from earthquakes and flooding are among the most common examples. Liability coverage is also usually limited to instances that do not involve negligence or malicious intent. Add-ons, such as flood insurance Irvington NJ, can help eliminate coverage gaps.
It’s a good idea to review the property damage, liability and add-on coverage of your homeowner’s policy carefully to ensure it meets your needs.