Homeowners insurance is a type of Property Insurance, it is also defined as contract between homeowners and insurance company in exchange of paying premiums, the company reimburse you for damages or loss caused by several problems up to limitations of policy, It also includes coverage for additional living expenses, liability and medical payments.
A standard insurance policy works by reimbursing policy workers who made claim, it depends on type of claim made by client:
1) How policy works when it comes to property:
● You can pay your insurance payments monthly, bi-annualy or annually.
● You can file a claim if your policy covers property get damaged by windstorm.
● If claim get approved, company reimburses you to pay repairs up to your policy cover limits minus deductible if there are any.
● It also covers additional living cost if house becomes uninhabitable and you need to stay somewhere else temporarily.
2) How policy works when it comes to your liability:
● Keep policy active by paying premium regularly
● If someone else gets injured by you or if your dogs bites someone or your child hits ball at someone window while paying – you can file claim with insurance company
● If claim gets approved the insurance company pays cost of repair of other people’s property or pay their medical bills as well
● If the other people sue for some matter, the liability portion pays for the cost of legal defenses and settlements.
What homeowners insurance covers?
The types of insurances policies, depending on coverage needs:
● Dwelling: Pays to rebuild or repair the structure of your house. Enough to rebuild your house from the ground.
● Other structures: Pays to rebuild or repair detached structures like gazebo. Typically covers 10% of coverage limit
● Personal property: Pays to repair or replace if any belongings get stolen or damaged. Typically 50% to 70% of the coverage limit.
● Loss of use: Pays for someone else medical expenses and property repair fees if you are at fault.
● Medical payments to others: Pays for medical expenses of a person no matter who is at fault.
A standard policy insures the structure or detached structures against all types of damages except Flooding or Earthquakes.
What homeowners insurance doesn’t cover?
It is does not cover charges of repair or rebuild of property if it is damages by below reasons:
● Acts of war
● Earthquakes, Sinkholes or Mudslides.
● Flooding
● Industrial smoke or pollution
● Mechanical breakdowns
● Intentional loss
● Negligence.
● Personal pet damage to your own property
● Pest or insect damage
● Standard wear and tear
● Drainage overflow
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