What Does Your Home Insurance Policy Cover?

10-Aug-2007

It is very important to know exactly what your home insurance policy is buying you before you commit yourself to a provider. To begin, consider what your options are.  The first part of your cover has to do with the dwelling itself. When you buy a policy, you must consider from which disasters (fire, lightning, etc.) you want to be protected; keeping in mind that floods, hurricanes and neglect are either separate policies or not covered at all. If you would like to change the list, you will need to discuss this with your agent. Keep in mind that you need to buy enough insurance to be able to rebuild your home. Often, other detached structures (garages, for example) can be included in your policy, for a small percentage of the total cost.    

Your personal possessions are also covered in a home insurance policy from the disasters listed in your paperwork. Usually, these items are covered for 50 to 70 per cent of your total cover value. To find out how much your possessions are worth, it is a good idea to take an inventory. There are several inventory templates available on line, but your insurer should be able to provide you with the appropriate paperwork if you would prefer to speak with them. Some policies include cover for your belongings wherever they may be in the world. Ask your insurer if this type of coverage interests you.    

Liability is cover for damage that you or your family members, including some pets, may do to another person or his belongings. Note that this is not true of your own family members or their belongings, however. This part of the policy tends to cover medical expenses, excluding you and your family, in addition to court fees and replacement costs.    

The last area of cover under home insurance is that dealing with expenses incurred while your home is being rebuilt after damage caused from an insured disaster. The expenses covered include, but are not limited to, hotel and restaurant bills. The amount of this cover is company and policy specific, but it hovers near 20 per cent of the insured value of your home. Again, if your home is insured for £100,000, your expenses up to £20,000 would be covered.  It is also important to keep in mind that with any major life change (for example, an increase or decrease in the number of people in your family) or any major purchase, you need to reconsider your cover.