Home Insurance 101 - Part 1
I have written Homeowners Insurance 101 and Homeowners Insurance 201 for this website to be brief yet thorough articles to help people like you acquire a good working understanding of what a Homeowners Insurance policy is designed to cover. My purpose is to provide you with the best information to help you understand the essentials of what items are covered and not covered while sparing you the non-essential details.
First of all it is important to understand that no two Home Insurance policy products are created equal. Each Insurance carrier designs their policy differently, so there are many variables one must be aware of in order to correctly examine and select the right Home owners Insurance policy for their Home. Policies can vary by Policy type, Policy Language, Coverage, Exclusions and Endorsements.
In Home Insurance 101 we will provide a good foundation for understanding of the essentials of what a Home Insurance Policy is designed to cover and not cover. In Home Insurance 201 we will go deeper into the specifics of what the typical Homeowner needs to look for and look out for when selecting a policy for their home such as the different policy types, policy language, and endorsements.
So Let’s Begin…
Essentially, Homeowners Insurance is designed to protect against financial losses large and small resulting from accidents, disasters or liability exposures. Coverage can also be referred to as: Home Insurance, Home Owners Insurance, Hazard Insurance, Fire Insurance, Dwelling Fire Insurance, or Landlord Insurance. It can even come under such industry terms as: HO3, HO5, DP1 DP2 or DP3 just to name a few. I will use some of these terms interchangeably throughout these articles to avoid redundancy.
A standard Home Owners Insurance policy covers the Housing structure or dwelling itself as well as the personal belongings that you own inside. It also generally covers the other structures that are on your property that are not attached to the main dwelling. (Which I will discuss in more detail shortly) Hazard Insurance also provides coverage for additional living expenses, generally referred to as Loss of Use coverage for when a covered loss to the home renders the home unfit to live in due to the severity of the damage. A Home Insurance policy is generally referred to as a package policy because it covers both damage to the Structural Property itself as well as your Personal Liability or legal exposure for injuries and or property damage you, your family or pets cause to others.
How is it covered?
A Fire Insurance Policy generally covers damage that is considered sudden and accidental. Losses that are covered are also called perils or covered losses. These can result from a fire that originates in the kitchen from say a coffee pot that is left on all day or from a brush fire. Damage from resulting smoke is also covered. Storm damage from things like hurricanes or tornadoes, lightning, wind, and hail are covered as well. Water damage is also covered. Say for example, if a pipe in the wall bursts or when the washing machine overflows.
Damage from burglary, theft and vandalism are also generally covered. So if the neighborhood kids decide to use the siding of your home for their latest spray paint masterpiece you’re covered. In addition, damage from falling objects such as a tree that topples during a heavy storm or an airplane or helicopter that falls from the sky and crashes into your house are also typically covered. Even damages resulting from an explosion or disruption from electrical current get covered as well. And finally what if there’s a snow storm and the weight of the ice or snow causes my roof to collapse? – you guessed it – Covered!
So…... What’s not covered?
There are also some common exclusions or things that are not covered that you need to be aware of. Most importantly, damage to the land or real property that your home sits on is generally not covered by any type of Home Insurance policy. Also, damage from earth movement or seismic activity which includes earthquakes and volcanic eruption are also not covered under a Home Owners Insurance policy. However, coverage for damages resulting directly from earthquakes and seismic activity are covered under what is referred to as an Earthquake Insurance Policy which can be purchased separately. Damage from flood waters arising from a tidal wave, tsunami, flash flood, or mudslide are also not covered. However, by purchasing a separate Flood Insurance Policy will cover these perils. What about Nuclear disaster? This is also not covered due to the potential catastrophic nature. In addition acts of war, military action and terrorism are also excluded. Damage from deferred maintenance and or wear and tear – are also excluded. Damage from Insects like termites or infestation from rodents like rats or skunks is also excluded. Finally, in most cases damage from pathogenic organisms like mold, mildew, fungus or rust are also not covered. However, some preferred carrier policies will include at least some coverage for mold or mildew remediation.
To continue to Homeowners Insurance 101 part 2 Click Here.
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Consumer Insurance Services Inc. is located in North San Diego County California. We specialize in personal insurance and assett protection. If you're looking for a local office or Insurance Agent we locally serve the communities of Carlsbad, San Marcos, Encinitas, La Costa, Vista, Oceanside, Solana Beach, Cardiff, Del Mar, and Carmel Valley.