Homeowners insurance is a type of insurance that protects your home and belongings. It is a financial buffer that covers damages that impacts the physical structure of the house and the contents within.
What types of incidents does homeowners insurance cover?
Homeowners insurance typically covers four different incidents that occur on the insured property
First, it covers the interior of your home. In the event of an accident, such as a fire, homeowners insurance will absorb the cost to repair your home.
Second, it covers the exterior of your home. For example, if your roof is damaged from strong winds and hail, your policy should cover the cost of renovations
Third, basic homeowners insurance will cover loss or damage to personal belongings within the home. The most common occurrence is theft. However, if a visitor accidentally breaks an antique in your home, your insurance can cover that as well
Finally, home insurance covers any injury that may occur while on your property. For instance, if a visitor trips and falls on your staircase and is severely injured, you may be sued for damages and medical expenses. Homeowners insurance can help protect you from these lawsuits.
How does homeowners insurance work?
Apply for home insurance
Homeowners insurance is not free nor automatic. You will need to apply for coverage. First, you will need to estimate your home’s replacement value and make a detailed inventory of all your belongings. Then, you can shop around for quotes. You may consider extended coverage, such as flood insurance, based on where you live and the amount of coverage that makes you feel comfortable and secure
With more coverage comes higher premiums and deductibles. Be sure to research the insurance company and the experiences of other customers. You would want to avoid companies that may be strapped for cash or seem financially unstable. They are much more likely to reject your insurance claim
File a claim
Once your policy is in place, it is important to know the proper procedure for filing a claim. Be sure to have all your documents in a secure location, such as in a small water and fireproof safe. You want to be able to access your important documents even if there is a flood or fire in your home.
In the event of a crime, such as theft or vandalization, you need to report it to the police immediately. Catalog every time you speak to an officer and request a police report. You will need to submit all these documents with your claim.
The next step is to inform your insurer. They will be able to guide you in more detail about what to do next and offer insight on your deductible, how long it will take your claim to be processed, and any required estimates for repairs
Fill out your claims in a timely manner. If you delay past the legal deadline, it may invalidate your claim altogether
Cooperate with the claims inspector, also known as an insurance adjuster, who will visit your home to determine how much the insurance company should pay for the loss. If you make any repairs in the meantime, keep all receipts and submit them to your insurance company for reimbursement.
If everything goes smoothly, you will receive a check to get your home back to the condition it was before the damage.
