Alyssa Lane
Basic homeowners insurance provides financial protection against unexpected damage to your home and belongings caused by disasters (e.g. fire, wind, hurricane, hail), theft, and accidents. It also covers liability claims against you, such as if you accidentally injure someone or damage their property. Home insurance policies vary, and standard policies do not usually cover floods or earthquakes. It is important to carefully read your policy to understand what is and isn't covered.
| Characteristics | Values |
|---|---|
| Damage to property | Covers repair or replacement of damaged property, including belongings and the structure of the house |
| Fire damage | Covers damage to the house and belongings caused by fire |
| Natural disasters | Covers damage caused by hurricanes, hail, lightning, and other disasters listed in the policy |
| Theft | Provides financial protection against theft |
| Liability claims | Covers liability claims against you, including injury to others or damage to their property |
| Additional living expenses | Covers additional living expenses if the house is damaged to the extent that it is uninhabitable |
| Medical expenses | Pays for reasonable medical expenses for those accidentally injured on the property |
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What You'll Learn
Fire, wind, snow, hurricanes and hail
Basic homeowners insurance covers damage to your home and belongings caused by fire, heavy wind, and other natural disasters. This includes damage to the structure of your house and your personal property. Standard policies typically cover damage caused by high winds, including those caused by hurricanes and tornadoes. However, it's important to carefully review your policy as some policies may exclude or reduce coverage for wind damage. Additionally, standard home insurance will generally cover hail damage, although there may be a separate, higher deductible for hail claims.
In the event of a fire, your homeowners insurance will cover the damage to your property and belongings. This includes damage caused by a fire that resulted from a power surge due to lightning. Homeowners insurance may also provide financial support if you injure someone else or damage their property as a result of the fire.
When it comes to wind damage, standard home insurance policies typically cover damage caused by high winds, including hurricanes and tornadoes. However, it's important to check your policy carefully as some policies may exclude wind damage or have specific exclusions, such as damage caused by windstorms. In the event of a covered claim, your insurance will cover the cost of repairing or replacing damaged property, minus your deductible.
Hail damage is typically covered by standard home insurance policies, and hail damage to roofs is one of the most common weather-related insurance claims. Similar to wind damage, there may be a separate policy or a higher deductible for hail-related claims. It's important to review your policy carefully to understand your coverage and deductible requirements for hail damage.
In summary, basic homeowners insurance provides coverage for damage caused by fire, wind, and hail, among other perils. Standard policies typically cover these perils, but it's important to carefully review your policy as there may be exclusions or separate deductibles for certain types of damage. By understanding your coverage, you can ensure you have the appropriate protection in place before a disaster occurs.
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Theft and accidents
Basic homeowners insurance covers damage to your home and belongings caused by disasters, such as fire, wind, snow, hail, hurricanes, and heavy rain. It also covers liability claims against you, for instance, if someone is injured or their property is damaged while on your premises.
Homeowners insurance generally covers theft from your home and property, including personal belongings stored off-site, such as in a rented storage facility. It also covers items kept in detached structures on your property. Most policies include coverage for your property while it is away from the home, subject to limitations. Coverage for personal items stolen while away from home is typically limited to 10% of your personal property coverage.
In the event of theft or a break-in, you should first contact the police to file a report and then submit a claim to your insurance company as soon as possible. The insurance company will determine whether the damage or loss is covered under your policy. If approved, you will be responsible for paying your deductible before the insurance company pays out.
You can also add accidental damage cover to your contents insurance or buildings insurance, usually at an additional cost. This covers damage caused by a single, unexpected one-off event, such as knocking over a TV or breaking a glass coffee table. However, it is important to note that portable electronics and clothes are often excluded from contents insurance accidental damage policies, and damage caused by pets may not be covered.
Accident insurance is a separate type of insurance that provides financial protection in the event of accidental injuries, such as severe burns or broken bones. It can help cover unexpected medical expenses, diagnostic testing, transportation services, and even non-medical expenses like rent or groceries. Accident insurance is not a substitute for regular health insurance coverage but can be a valuable supplement to help with extra expenses when an accident occurs.
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Liability and lawsuits
Basic homeowners insurance can provide financial protection in the event of a liability claim or civil lawsuit. This includes scenarios where you or your family members accidentally injure someone or damage their property. For example, if a guest slips and falls on an ice-covered walkway or an overserved guest leaves your home drunk and gets into an accident, your personal liability coverage may pay for the damages and provide you with a legal defence, up to your policy's limits. Medical payments coverage usually ranges from $1,000 to $5,000 and can cover a guest's medical expenses, regardless of fault.
Personal liability coverage also extends beyond your home. For instance, if you or your children accidentally injure someone while playing ball in the park, your personal liability insurance can cover the person's medical bills and legal costs if you are sued, within your liability policy limit. Similarly, if your child accidentally breaks a neighbour's window, this would typically be covered under the property damage portion of your policy.
It is important to note that personal liability coverage has limitations and exclusions. Intentional acts, such as deliberately pushing someone down the stairs, are typically excluded from coverage. Additionally, your homeowners' liability coverage does not extend to business-related activities or vehicle-related injuries. If you run a business from your home and someone is injured on your property while visiting for business purposes, this would be covered by business insurance. Furthermore, if you have valuable assets and savings, you may be a more attractive target for lawsuits, and it may be prudent to consider additional liability coverage or umbrella insurance to enhance your protection.
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Additional living expenses
It is important to note that the policy will only cover additional expenses, not your typical expenses. For instance, if you’re staying in a hotel for a month, your homeowners insurance would cover your hotel bill but not your mortgage and light bill at your home. Coverage limits and details under additional living expenses can vary by carrier. You can check with your insurance agent or read your homeowners policy to determine what coverage you have under loss of use.
In addition to having a dollar limit, an ALE policy may also have a time limit for how long it will continue to pay your additional costs. Although coverage details for additional living expenses can vary by carrier, generally speaking, additional food, transportation and housing costs are typically covered as long as they are considered reasonable. If you submit a restaurant receipt from a five-star restaurant, your homeowners insurance company may not want to cover it.
Your insurance carrier will continue to pay out additional living expenses until you can move back into your home or until you meet your coverage level, whichever comes first.
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Medical and funeral expenses
Basic homeowners insurance covers damage to your home and belongings caused by fire, heavy wind, and other natural disasters. It also covers liability claims against you, such as when you accidentally injure someone or damage their property.
Medical Expenses
Homeowners insurance policies typically include medical payments coverage, which helps pay for small medical expenses if a neighbour, guest, or any non-resident is injured on your property. This coverage is usually limited to between $1,000 and $5,000 per occurrence, although some insurers may offer up to $10,000 or even $25,000 in coverage per occurrence. This coverage is important because it can help prevent minor injuries from escalating into expensive lawsuits.
Funeral Expenses
Basic homeowners insurance does not typically cover funeral expenses. Instead, funeral expenses are usually covered by life insurance policies or burial insurance policies, which are specifically designed to provide financial protection for your loved ones in the event of your death. These policies can help cover funeral costs and other final expenses, such as hospital and doctor bills, as well as estate settlement costs.
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Frequently asked questions
Homeowners insurance is a policy that combines property and casualty coverages. It provides financial protection against unexpected damage to your home and belongings caused by disasters (e.g. fire, wind, hurricane), theft, and accidents.
Basic homeowners insurance covers damage to your home and belongings caused by disasters such as fire, wind, or snow. It also covers liability claims if someone is injured on your property or their property is damaged.
Basic homeowners insurance does not cover all types of damage. Typically, it does not cover damage caused by floods and earthquakes, or routine wear and tear. It also may not cover your roof if it needs to be replaced.
If your home is damaged by an insured peril to the extent that you cannot live in it, basic homeowners insurance can cover additional living expenses such as housing, meals, and warehouse storage.
In return for a premium paid to an insurance company, you are financially protected against certain types of damage and lawsuits. If your home or belongings are damaged by a covered peril, you can file a claim with your insurance company. After approval, you pay your deductible, and the insurance company pays out the remaining amount.
