The Different Types of Home Insurance Policies

If you are a new home buyer, understanding the different types of home insurance that are available for you to purchase can be overwhelming. It’s important that you get enough coverage to help cover you from any major financial loss in the future. However, you don’t want to spend your entire paycheck on home insurance either. Today, we are going to briefly go over the different types of home insurance to help you get started.

Dwelling Coverage 

This is the bare minimum when it comes to home owner’s insurance policies. Each policy will start with this base coverage. This includes protection for the structure of the home in the event fire, theft, vandalism, hail, or other forces damage your home. This covers the floors, ceilings, walls, built-in appliances, and anything physically attached to the home’s structure.

Contents Coverage 

This is an upgraded level of insurance that you can obtain as a homeowner. It covers the items in your home, including clothing and furniture in the event of a disaster. You will receive funding for the value of these items if the event that a covered incident does occur.

Personal Liability 

This type of policy is strictly intended to coverage bodily injury that occurs on the property. If someone sustains an injury while they are on the premises of your home, you can be liable for damage. This also covers damage to another person’s property that takes place at your home.

Add-On Coverages

Apart from the main types of insurance above, there are additional add-ons that you can have on your policy. All of these are intended to help decrease your risk of a financial upset in the future when disaster strikes.

Flood Insurance 

Most homeowners don’t realize that their dwelling insurance policy doesn’t always cover flood. This is an insurance add-on that you would be wise to purchase. This comes with its very own deductible in the case you need to claim damage to your home.

Earthquake Insurance 

This type of insurance also comes with its own deductible. This covers any damage to your home that is caused by an earthquake. Most homeowners who don’t live in an earthquake-prone area won’t opt for this type of additional coverage.

Water Backup of Sewer 

No one wants to deal with a sewer backup in their home. Typically, when this happens a restoration company, such as Square One Restoration, is called in to perform cleanup for the home. This can be an expensive restoration process, which is why this is an optional insurance add-on for homeowners.

Replacement Cost Coverage 

A home can depreciate with value as the structure ages. A replacement cost coverage insurance add-on will help to ensure that you get more money in the event of a total loss of your home. This is to help secure the homeowner in the event they would need to rebuild.

As you can see, there are many options when it comes to homeowner’s insurance. It’s a good idea to run through the list and decide on the events that make the most sense for coverage of your specific residence.

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