Standard Homeowner Insurance Policies
Almost all standard homeowner insurance policies provide many of the same protections. Learning which home sections are and are not typically protected under an insurance policy is the responsibility of any frugal homeowner.
Standard Policy Features
Coverage of physical damage to the inside or exterior of your home is a homeowner insurance mainstay. However, this does not include damage from many natural disasters like floods. Your plan will also likely protect the personal belongings that are ruined in an accident that damages your home. Personal liability is one of the most important aspects of any home insurance policy. This section of your policy protects you from lawsuits filed as a result of an accident that occurred on your property. Homeowner insurance policies typically cover the cost of a hotel room if your home becomes unlivable due to covered damages.
Claim Payment Methods
A claim will be rewarded one of three ways, depending on the cost and breadth of your coverage. An “actual cash value” claim covers the value of your home and the current value of your possessions. This means you won’t necessarily get the full amount of what the possessions actually cost. You’ll need to upgrade your policy with a “Replacement Cost” claim if you want a guarantee for the full value of these items and your home. Furthermore, invest in an “Extended Replacement Cost” policy to ensure your claim accounts for inflation.
Additional Foundation Insurance
Unfortunately, damage to a home’s foundation is typically one of the many exceptions written into a standard policy. This trend stems from both the difficulty in repairing a foundation and the relative ease with which a foundation can become compromised. Homeowners interested in insuring their foundation should seek to add an “endorsement” to their policy that boosts their coverage. Work closely with your homeowner’s insurance agent to adjust your policy for full foundation protection.