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Understanding homeowners insurance policy elements

On Behalf of | Mar 23, 2020 | Homeowner Claims

For a first-time home buyer, there can be many new things to learn and understand. Some of these can be confusing at times. One thing a person buying their first condo, townhome or house should learn about is homeowner’s insurance. There are different types of policies with varying coverage levels.

As explained by Policy Genius, the basic elements of any homeowner’s insurance policy will provide coverage for the home structure itself, any personal belongings in the home and the cost of another place to live should the owner be displaced. This may be referred to as hazard insurance coverage. Payment for medical treatment of a person injured on the property may be covered under a homeowner’s insurance policy. These policies also provide some protection for liability of other assets.

According to NerdWallet, hazard insurance coverage options include a named-peril and an open-peril policy. The first, also referred to as an HO-2 policy, provides coverage for a smaller subset of events than the latter, also referred to as an HO-3 policy. In the latter, all forms of events would be covered apart from those specifically named as exclusions by the insurance provider.

Events covered by insurance

Some standard events covered include damage caused by overflowing water, theft, vehicle damage, fire, smoke or falling objects. People who live in areas where earthquakes or floods may routinely be a threat may want to consider purchasing policies that provide coverage for damage due to those events. Persons with high-value assets such as specialty art or jewelry may want to investigate additional coverage policies just for those items.