Protecting your home with homeowners insurance not only is prerequisite to obtaining a mortgage; it also is an investment you can’t afford not to make. Therefore, it is important that you understand exactly what your policy covers before disaster strikes.
What is covered?
There are six basic types of homeowners insurance policies. A standard homeowners insurance policy, referred to as an HO-3, provides coverage for the following areas:
- Dwelling: With an HO-3 policy, you are covered if there is structural damage to your home. However, it is important to note that you are only covered up to the limits of your policy. If the cost to repair the damages extends beyond those limits, you will be responsible for paying the rest.
EHow explains how you can determine if your home has structural damage.
- Other Structures: Common structures that are covered if damaged include detached garages, fences and work sheds. To learn more about other structures coverage, visit homeinsurance.com.
- Personal Property: This aspect of the HO-3 policy protects your personal items such as clothing and sports equipment from theft, fire or other perils. While it covers your items even when you’re on vacation, certain policy limits apply.
- Loss of Use: If you are unable to live in your home due to a covered claim, your HO-3 policy will cover hotel, living expenses and restaurant bills incurred while your home is uninhabitable up to the limits provided on your policy.
The Nest details the restrictions and limitations with loss of use coverage.
- Personal Liability: Liability protection is comprised of two parts: personal liability and medical payments. Personal liability covers claims or lawsuits against you arising out of bodily injury or property damage to others caused by an accident on your property, or by accidents away from your property, caused by you or family members who live with you. The coverage also pays for your legal defense should you be sued for a covered claim. However, coverage does not extend to losses caused by intentional acts, business related incidents, accidents covered by auto insurance, or claims covered by worker’s compensation insurance.
However, it is important to note that there are increasing exclusions for claims associated with animal liability and injuries caused by trampolines and swimming pools. Talk to your insurance agent to understand the distinctions.
The Legal Examiner provides further information on legal issues and liability.
What is not covered?
While the standard HO-3 policy includes extensive protection against perils that are out of your control, the following disasters are not covered:
- Earth movement: earthquakes, sinkholes, landslides, mudslides, etc.
- Water damage: In addition to floods, this exclusion includes sewer back-ups and water that seeps through the foundation.
- Faulty construction and the costs needed to bring your house up to code.
Fortunately, you are able to purchase additional insurance to protect against earthquakes and floods should you qualify. For more information on earthquake and flood insurance talk with our great team at Vargas & Vargas Insurance.
Furthermore, you may want to talk with your agent about hurricane deductibles when reviewing your policy. Massachusetts is one of 18 states that permit insurers to charge to lower hurricane deductibles, according to the Insurance Information Institute.
Vargas & Vargas Insurance is here to help you understand and fulfill all of your insurance needs, providing you with the most complete protection you deserve.
Give us a call today at 877-550-0025 to learn more about what we can do for you.
