What does homeowners insurance cover and not cover

 

Whosoever first used the idiom ‘as safe as houses’ must have been having a homeowner’s insurance. For those of you who don’t know, Homeowners insurance is a type of package policy that guarantees protection to the house structure and property from events like fire, storm & theft. According to a recent report, 22% of consumers said they wouldn’t claim a small loss in fear it would make their premiums rise. Combine the above statistics with a mere 11% of millennials aware of insurtech companies. No doubt, the insured property is a muddled water area for most people. In this blog, we will try to clear some of the air around this subject.

Is a home warranty the same as home insurance?

The concept of a home warranty is far from the concept of insurance. A home warranty is provided to house systems and appliances for a definite period of time, usually not exceeding more than 2-3 years. 

Home insurance, on the other hand, is a much wider concept taking in the entire property structure, belongings, and liability in case a loss occurs inside the home. The coverage provided under home insurance is much bigger and goes on for a longer span. 

What does homeowners insurance cover and not cover?

Almost all homeowners' insurance policies provide coverage against events like fire, storms, theft, break-in, etc. However, the scope of coverage will differ when the events are acts of God. The policy document contains the details regarding the scope of coverage and circumstances that shift the liability to the company. 

1. House infrastructure and other dwellings

Almost all the policies cover the basic home structure in their contract. Apart from that, other non-business structures which are a part of the property are also included in the coverage document. These might be a garage or a farm attached to the property. However, the scope of coverage provided to these structures might differ from the parent property.

1. Personal belongings

A typical room insurance policy takes into account the personal belongings of the client. All such belongings are provided coverage as per the policy documents. Getting a replacement cost for your expensive items can prove to be beneficial as it provides you a sum sufficient enough to buy a new one. In this manner, clients can escape depreciation charges, which are deducted while following the fair market value system.

1. Protection against liability

Suppose someone got injured inside your building premises and you have no idea about their presence. Without homeowners insurance, a person will be liable to pay for all the hospital expenses. However, personal property insurance ensures that the client is free from legal limbo. 

 

What is not covered under a homeowners insurance policy?

Homeowners' insurance companies also make certain exclusions to save themselves from accumulating losses. These events are usually uncovered but a lot depends on the location and severity of the cases.

1. Acts of god

Events like floods and fire when occurring due to natural causes are termed as acts of God. In such cases, an insurance company distances itself from paying the sum. A flood occurring due to in-house negligence or faulty bathroom wires is fully covered. 

1. Expensive personal belongings

An insurance policy doesn’t cover your vehicle or expensive personal items. These items might be covered up to a certain limit but the full coverage can only be attained via separate insurance for the respective item. 

1. Injury caused to oneself due to negligence

Being the property owner, if one isn’t aware of the ice tray and falls over it, then the said injury isn't covered under the homeowner’s insurance. Similarly, avoiding regular furniture repairs can cause injury which isn’t covered under the policy documents. 

 

Despite all these exclusions, a homeowners policy has been a successful tool in empowering the property owners of the modern world. A thorough reading of all the policy documents guarantees wise decision-making and blanket protection to your beloved house.