The dream to be a homeowner in the U.S. has heightened and stayed steady in recent years, despite the pandemic and fear of an impending global recession. As per recent reports, there is an estimate of more than 131.2 million households in the U.S., out of which 59% are owner-occupied. 

However, being a homeowner is no easy task. Many challenges come with owning a house or apartment, and numerous risks that one needs to be mindful of. However, thanks to insurance policies, it becomes convenient to have measures in place that will allow you to manage situations in the event anything goes wrong. At present, over 93% of U.S. homeowners are covered by an existing homeowners insurance policy. 

A homeowner’s insurance policy is diverse and includes numerous benefits for first-time and long-term homeowners. These insurance policies cover areas that will allow individuals to receive compensation or compensate others if any damage, injury, or faults occur within the insured property. Although over 47% of homeowners lack sufficient knowledge about what a standard policy covers, here’s a review of a few essential things that come under it. 

What Comes Under a Homeowner’s Insurance Policy?

  • Dwelling 

It is a coverage given to homeowners for property management and looking after any damages the property may suffer due to specific and established conditions. The coverage often has a set amount that individuals can claim. It may differ from one insurance broker to another with different premium rates. Additionally, owners have the option to list their homeowners property management companies as ‘additional insured,’ to keep them in loop about any policy changes. 

  • Other Structures 

Under this, the insurance policy covers any damage to external structures attached to the main property, such as tool sheds, gardens, garages, etc. There may be a limit on how much is covered and the type of structures included in the policy. When taking a new homeowners insurance policy, it is best to look at the structure coverage in case you have any on your property needing additional protective measures.

  • Personal Property 

Under this policy, an insurance broker may provide a certain coverage limit to a homeowner’s personal property if unprecedented damages occur within the insured property. It may fall at 50% of the primary insured amount or any other percentage that is agreed upon by the insurance broker. Some personal property items that are covered include: 

  1. Jewelry  
  2. Antiques
  3. Furs    
  4. Collectibles
  5. Fine arts 
  6. Firearms
  7. Silverware   
  8. Money 

Did You Know?

Even with the help of numerous financial advisors, insurance agents, and legal aid, half the U.S. households are underinsured. They do not have sufficient coverage to cover the majority costs of their properties and personal assets at the time of a disaster. For example, floods are partly responsible for 90% of all U.S. disasters and aren’t covered under homeowners and renters’ policies.  

 

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  • Loss of Use

Under this, the insurance policy provides homeowners coverage if the property gets damaged to the extent it becomes unlivable. The insurance policy may cover about 20% of the total amount for the insured property. The insurance policy includes coverage for expenses towards meals, temporary housing, storage, etc. When taking a new insurance policy, make sure to have these additions to be prepared if unfortunate situations hit. 

  • Personal Liability 

An insurance policy also provides coverage for instances where damage occurs to other individuals on the property. It allows the homeowners to compensate the amount the broker deems fit to manage compensation. 

  • Medical Expenses

Under this, the insurance policy provides coverage to help manage medical expenses that may come to people injured on the property. It does not cover injuries to people in the household but only to external visitors. When taking a new insurance policy, you must look into these factors to ensure that you have protective measures in place at all times. 

Did You Know?

California has the second-lowest home insurance rates in the country, at an average rate of $1,380 a year. On the other hand, Oklahoma is accounted to have the most expensive home insurance rate at $5,317 a year, which is $2,540 higher than the national average rate. 

Why are Insurance Policies Necessary?

A homeowners insurance policy provides a protective measure for unfortunate events on a property. Based on location, insurance rates may change due to several factors, but to get a better idea, homeowners must contact their agents in each state to discuss the variables in length. For example, a property management company San Francisco can determine your needs based on factors most essential to you and the property and help you save on the insurance policy with additional discounts. 

California wildfires are expected to worsen this year, which are 0.3% likely to affect over 4.6 million properties. Due to extreme environmental changes and persistent dryness, this data is further expected to reach 5.5 million properties by 2053. To avoid moderate or significant wildfire risks, homeowners must ensure that they have enough coverage to cover the majority costs of their property and personal assets in case of a disaster. 

There are different perils that an insurance broker considers and uses the information to craft a policy that will give homeowners affordable coverage for various events. However, insurance policies only provide amounts up to a certain limit or for specific situations. This is why homeowners’ insurance premiums are slowly on the rise in recent years, with an increase in the average rate in 2018 (3.1%) and 2019 (1.8%). When considering one for your home, you must be mindful of the different terms and conditions of the premier policy that will give you sufficient protection you need for your property and other personal belongings. 

A homeowners insurance policy is an essential requirement that all homeowners, old and new, must consider for their homes. Whether it’s single or multiple properties, having an insurance policy in place will ensure that you have the means to handle different types of unprecedented events that may take place. Hence, when adopting a new policy, ensure that it has everything you need, a detailed set of conditions, and proper coverage for your housing requirements.