Homeowners Insurance Policy in US

It is important to understand the extent of covered offered by the homeowners insurance policy in US before taking a decision. This will help homeowners keep track of:-

  • Various assets covered
  • Maximum coverage on various assets
  • Maximum coverage on other aspects like personal liability and loss of use of home.

Assets covered by homeowners insurance policy in US can be classified into three categories:

  • Main dwelling, other structures, and personal property inside these structures
  • Personal liability and payment to medical expenses of third parties
  • Loss of use compensation

Actual coverage on homeowners insurance policy in US is a mix of personal choice of the insured and proportional value derived from total amount for which dwelling or home is covered.

Main Dwelling Coverage

Individuals have the option of choosing coverage for main dwelling according to their personal need and preferences. You can value your property according to:

  • Cost of rebuilding per square foot
  • Price of materials used in the house
  • Cost of labor and other overheads involved in rebuilding to obtain coverage accordingly.

You will have to pay relatively high premium if you opt for very high coverage. Choosing a very low coverage will help you reduce premiums but will leave you with a huge gap when actual damage takes place and claim is filed on homeowners insurance policy in US.

The coverage offered by homeowners insurance policy in US on other structures like outhouses, servant quarters etc depends on total coverage for the primary dwelling house. 10-15% of dwelling cover is offered as coverage for other assets. Other property will be covered for $10,000 - $15,000 on a home covered for $100,000.

Content Insurance

Contents inside the home constitute a significant portion of our worldly assets. Insurance company restricts maximum compensation to 50% of dwelling cover irrespective of actual value of the assets. For a $100,000 cover, the content cover will range to $50,000 on a standard homeowners insurance policy in US. Owners having more valuable assets must obtain extra cover through riders or choose a higher value for the dwelling unit. Make sure you consider this before choosing homeowners insurance policy in US.

Personal Liability

Coverage for personal liability owed to others and cost of medical expenses due to injuries in own premises are determined by insured. This figure should be assessed on basis of average liability paid by homeowners insurance policy in US to third parties.

Loss of Use Cover

A standard homeowner’s insurance policy in US provides assistance for loss of use of homes as well. This money is used to setup alternative residential arrangement until damaged property is repaired or rebuilt. Standard coverage is 20% of cover for dwelling unit. For dwelling cover of $100,00, the loss of use cover will work out to around $20,000

Each and every component of homeowner’s insurance policy in US should be assessed and the amount should arrived at intelligently to enjoy a maximum protection at minimum cost.