Basics of Home Insurance

Home insurance is available to those that own their house or flat. In general, home insurance covers the building that you live in, or part thereof, as well as your personal possessions, liability for damage done to people or their things inside of your home, and the costs incurred if you have to live somewhere other than your home for a time because it was destroyed.  Disasters not covered under home insurance include floods, earthquakes and personal neglect of the upkeep.  You will need to buy separate insurance to protect your home in the case that either of the first two occurs (floods or earthquakes).

The first part of your cover has to do with the dwelling itself.  When you buy a policy, you must consider from which disasters (fire, lightning, etc.) you want to be protected.  If you would like to change the list, you will need to discuss this with your agent.  And keep in mind that you need to buy enough insurance to be able to rebuild your home, if need be.  Often, other detached structures (garage, for example) can be included in your policy, for a small percentage of the total cost.

Your personal possessions are also covered in a home insurance policy from the disasters listed in your paperwork.  Usually, these items are covered for 50 to 70% of your total cover value.  For example, if you have taken out ?100,000 of insurance on your dwelling, you would have between ?50,000 and ?70,000 to cover your personal possessions.  To find out how much your possessions are worth, it is a good idea to take an inventory now.  Waiting until after the disaster will be much more difficult and stressful.  To do this, search for a program or outline on the Internet, fill it out, make copies, and keep a few in different locations.  Some policies include cover for your belongings wherever they may be in the world.  Speak to your agent if you’re interested in making an inventory, and they’ll provide you with the tools you need.

Liability is cover for damage that you or your family members, including some pets, may do to another person or his/her belongings.  Note that this isn’t true of your own family members or their belongings, however.  This part of the policy tends to cover medical expenses, excluding you and your family, in addition to court fees and replacement costs. An example of when liability insurance would be if someone were to slip on ice in front of your home and break his or her leg. Your liability insurance will cover the hospital bills and the court costs (in the case that legal action is taken).

The last area of cover under home insurance is that dealing with expenses incurred while your home is being rebuilt after damage caused from an insured disaster.  The expenses covered include hotel and restaurant bills for the time that you are forced to live somewhere other than your home.  The amount of this cover is company and policy specific, but hovers near 20% of the insured value of your home.  Again, if your home is insured for ?100,000, your expenses up to ?20,000 would be covered.



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