Home Insurance: What is it?

Purchasing a home insurance plan will protect your home, family, valuables and other belongings in the event of a misfortune. This can include natural disasters, theft, accidents or vandalism. The general purpose is to rebuild or replace damaged property, whether it is replacing a new laptop that was stolen from your home office or building a new fence that was knocked down during a heavy thunderstorm.

Despite the name, home insurance does not just work to protect your home; it will also shield you from the costs incurred due to accidents that are caused by your pets, property or family. For example, you can be protected from the costs of a window broken by your child or your dog that digs holes in your neighbor’s yard.

Perhaps the part that most are familiar with is the policy portion that covers damage to the home contents and the building itself. Naturally, every policy will differ, so you will need to consult with various advisors to ensure you are clear on what your policy will and will not cover. Some policies may not provide money for damage due to tornadoes, hurricanes, fire, mudslides or other natural disasters.

Some policies will also limit the reimbursement. The insurance is designed to ensure that you not panic should you lose legal documents, clothing, computers, family heirlooms, vehicles or other such collectibles. However, you will need to find a policy that will match the actual value of your valuables. There are methods of increasing how much is covered as long as you plan ahead.

Following a natural disaster, home insurance can provide the means to rebuild the home just as it was before, including the basics like electrical, flooring, roofing, framing, appliances and plumbing. Some plans may also include furniture, trees, paint, fences and more. Some policies still will also reimburse you for the depreciated cash value of items in an older home, though most can provide the expenses of replacement.

Liability is another important aspect of home insurance coverage. This is what states your provider can help with the court costs, with the damage costs and what other expenses arise due to accidents that your pet or a member of your family have caused or due to an accident that occurs on your own property. For example, if your mailman wants to collect medical damages after slipping and breaking his ankle on your stairs or if your child breaks a neighbor’s fence, your coverage could handle the cost for you.