All house and apartment owners need home insurance. In addition to protecting your property and belongings from theft or damage, it’s a requirement that all mortgage companies demand borrowers.
Plus, whether it’s required or not, having home insurance is the smartest way to provide financial protection for your house and belongings.
Home insurance includes various coverages that can help you pay to replace or repair your properties if they are damaged by outside perils, such as accidents or theft.
However, it’s essential to know how home insurance coverage works.
Types of Coverages in a Homeowners Insurance Policy
All insurance policies are different. Therefore, you must read your documents to know their coverages.
However, every homeowner’s insurance has separate policies, including house or apartment damage. They also include other structures, personal property, additional living expenses, comprehensive personal liability, and medical expenses. Let’s focus on the first three.
A home damage policy represents the insurance maximum amount or the most you receive if your house or apartment is totally destroyed.
Coverages for other structures are often part of most insurance policies. They help pay to repair or replace man-made structures that are not permanently attached to the home.
The personal property policy covers personal property damage or loss.
What Qualifies as a Separate Structure?
Homeowners insurance considers a separate structure to be any building or external feature with a clear separation space from the main property, such as:
- Detached garage
- Driveway
- Gazebo
- Fence
- Detached patio
- Guesthouse
- Mailbox
- Toolshed
The policy for other structures usually covers items with a non-permanent connection to the home. They should be separated by fences or utility lines.
What Qualifies as Personal Property?
In terms of insurance purposes, personal property includes the stuff you own, whether you live in your home or a rented apartment. The items usually covered by this policy are:
- Furniture, such as beds, chairs and seating, desks, tables, and cabinets
- Home appliances, such as white goods (refrigerators, air conditioners, washing machines)
- Electronics, such as TVs, PCs, and DVD recorders
- Clothing
- Jewelry, in some cases
What Do Both Policies Cover?
Separate structure policies differ. However, the insurance generally pays to repair or replace features or buildings damaged by circumstances beyond the owner’s control.
Such circumstances include fire, hail, fallen trees and other objects, lightning, wind, theft, or vandalism.
The personal property policy can help you repair or replace your belongings after a theft, fire, or other covered loss.
Main Difference between Separate Structures and Personal Property Policies
The personal property policy covers items you own or use within your house or apartment. However, detached structures only include buildings that have no permanent connection to a home and are properly fenced.
A swimming pool could be defined within both policies; for example, an in-ground swimming pool is covered by homeowners or separate structure insurance.
However, all above-ground pools are typically covered by personal property protection.
Final Thoughts
Knowing the different policies that your homeowners’ insurance offers can help you find a better solution if your property has been damaged or destroyed.
Do you need to repair your house or replace your belongings? Consider the information you found here, read your insurance papers well and talk to your provider. Remember you can upgrade your coverage or leverage the one you already have!
