Understanding Homeowners Insurance Terminology
Navigating the world of property liability can prove to be quite difficult if you don't understand what some of the more commonly-used terms mean. And not understanding can mean that you may not be making as informed a choice about your insurance company.
There is more than one type of policy for homeowners. However, there is terminology which appear in a standard homeowners insurance policy that it's likely you will have seen before. Of course, you should always get in touch with the company writes your policy when you need more specific details.
Basic Coverage Types
There are several areas of coverage included in the standard homeowners insurance policy. They are:
- Medical payments
- Loss of use
- Liability protection
- Other structures
This helps with the payment of medical bills should someone become injured while on your property but that individual does not plan to file a lawsuit against you. Typical coverage is $1,000 per person per incident, but this can be increased by purchasing a higher coverage level.
Content defines all of your personal belongings inside the home, such as jewelry, furniture and electronics. While a standard policy may cover you from 50-70% of your dwelling limits, you should be aware that some items may carry individual limits. That being said, it's important to review your policy carefully.
The amounts on this portion of the policy exist so that you can replace your house if an event occurs which causes you to lose it, and everything within, completely. Dwelling coverage also dictates the limits for the other coverage types your policy lists.
Loss Of Use
Should your dwelling be rendered either partially or completely uninhabitable as the result of the loss of something else covered under your policy, this portion of your coverage would reimburse you for expenses incurred while not in your home, such as motel room costs and dining, and is up to 20% of your policy.
This increasable limit will assist you with the protection of your finances should a covered lawsuit be filed against you by someone who became injured while on your property. The standard limit for liability protection is $100,000.
Structures on your property not covered by the above sections of your policy will be covered in this section, and as a percentage of your dwelling coverage. Usually, your coverage for other structures will be up to 10% of your dwelling coverage.
Percentage Of Common Homeowner's Insurance Coverage Types
What Affects The Premium Amount You Pay?
There are actually many factors that will affect how much you pay for property liability coverage. For example, the materials used to construct your home can affect your policy cost, as a home that's made of brick will usually carry a lower premium than one made of wood.
Your home's age and condition can also affect your costs, as can your home's proximity to a water source and community resources, such as a fire department.
Understanding homeowners insurance terminology can help demystify the process of selecting the best policy for you. These policies are definitely not one-size-fits-all, and consumers should determine their specific needs and match them to a policy type that best matches those requirements.