If you are a first-time homebuyer, you are about to face a set of unfamiliar challenges. Homeowners insurance is a critical step in the process of buying a home. This insurance protects one of the biggest purchases in a lifetime. With homeowners insurance, you can protect not only the equity, but also the potential growing value of your property over time. It is worth taking some time to really understand your options. In some cases, you may want to add a supplemental policy for an additional layer of protection.
What Does Homeowners Insurance Cover?
It is crucial to understand what your homeowners insurance covers – and what types of perils are excluded. The homeowners insurance you purchase would likely be an HO-3 if you purchased a single-family home. It is the most common type of insurance policy for homeowners, delivering a comprehensive level of protection, including personal liability. Here are some other protections homeowners insurance typically provides:- Personal property coverage: Your personal possessions are valuable, so most homeowners insurance provides coverage if your property is damaged by a covered peril.
- Dwelling coverage: The dwelling portion in your homeowners insurance can protect the actual structure of your home.
- Other structures coverage: Other structures include fences or detached fences, which are typically covered by an HO-3.
- Medical payments coverage: Accidents happen and if someone has an accident and gets injured on your property, your homeowners insurance will likely cover their medical bills.
- Liability coverage: If someone sues you for being injured on your property, your homeowners insurance can cover legal fees and judgments, up to the policy limits. For higher levels of coverage, consider an umbrella policy.
