Importance Of Homeowners Insurance in America

Introduction

Homeowners insurance in America, formerly known as fire and casualty coverage, is a financial tool which protects a homeowner from damages to their home as well as certain liabilities. The most typical form of homeowner's insurance in America is called HO-3 or the “Special Form Homeowner Policy.” A bank will require this coverage to be maintained as part of a mortgage.

Following is the type of coverage’s found in typical homeowners insurance in America policies.

Fire – Homeowner's insurance in America was initially designed to cover the damage caused by fire. This includes fires that are caused by accidents or negligence as well as fires intentionally set by someone not covered under the policy. As a consequence it also covers damage caused by smoke.

Water damage – damage caused by leaking pipes or ruptured water lines are typically covered by homeowner's insurance in America. Insurance companies also cover damage caused by mold, which is often a consequence of water damage. This does not typically include flood coverage.

Floods – this is considered additional coverage in certain areas of the country and in other cases, it is required, especially when a bank has a mortgage on the house. It is an expensive option in areas where flood risks are considered to be high. Floods are the most common type of natural disaster in the country.

Earthquakes – earthquake coverage is an additional package that is not included in most homeowner's insurance in America policies. In zones that have a recent history of earthquakes this coverage can be highly expensive. It may also be required by banks as part of their mortgage agreement.

Windstorms – Damage due to tornadoes and hurricanes are covered by homeowner's insurance in America policies, although in some high-risk areas, there may be restrictions that insurance companies impose.

Crime – Vandalism, theft and arson are covered by insurance policies as long as the culprit is not a policyholder.

Weather Issues – damage from lightning and hail are covered under standard homeowner's insurance in America policies. If a tree falls on a home, most policies cover the repairs and some of the cost to remove the tree.

Liability – financial losses due to a dog bite or a neighbor slipping on the porch are typically covered by homeowner's insurance in America up to $100,000. Certain breeds of dogs are often excluded from policies, and most insurance companies have a “first bite” rule – after the first bite, any future bites by the offending dog is no longer covered.

Food Spoilage – loss of food in the refrigerator due to a power outage may be covered under certain policies. It is always wise to check with the insurance carrier or an agent to see if this coverage is standard or optional.

Personal Property – loss of personal property such as golf clubs and computers are covered by a homeowner's insurance in America policy. Certain high-value items may require additional policy benefits called riders for a certain additional fee. In addition, this protects belongings in a car, and some insurance carriers also protect some of a child's property if they are living in a college dorm, but not in an off-campus apartment.

Building Code Changes – If a home is destroyed, the additional costs of rebuilding a house according to new building ordinances and rules is not typically covered in a homeowner's insurance in America policy. It is additional coverage that must be asked for and purchased.

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