Setting up a homeowners insurance policy is a good way to protect the investment you've made in your residence. You may wonder, however, what level of coverage actually comes along with it. It's a good idea to learn a bit about the coverage that's available before you discuss your needs with a homeowners insurance services agent.
What Basic Coverage Includes
A basic homeowners insurance policy, referred to in insurance parlance as an HO-1, covers a house and the possessions contained within it against a number of unlikely events. These include fires, civil unrest, vandalism, and objects thrown from vehicles. This means, for example, if a lightning strike hits your electrical system and kills your TV, there's a good chance both will be covered. You'll also be insured if something happens to a third party on your property.
Basic coverage tends to include things that are unlikely in your region. For example, someone in Kansas could easily be insured against volcanic eruptions, while a person living on the big island of Hawaii isn't going to be covered unless they pay a premium for a radically more expensive policy.
Detached structures that are on the same property are usually covered. You might have a garage or a shed, and your homeowners insurance will cover the same things it would cover for your house. It's prudent, though, to always discuss the specifics in detail with your agent before agreeing to anything.
What Basic Coverage Rarely Includes
Some events are difficult to predict, and that makes insurance carrier tepid about covering them. Mold is a common case. While there are regional components to mold, such as it's much more likely to occur in the U.S. east of the Mississippi than in the west, there are less-predictable elements. A house might, for example, be in a low-humidity climate but have a malfunctioning A/C unit that ends up encouraging condensation.
Homeowners insurance also is considered different than mortgage insurance. Likewise, if a landlord owns a place, the insurance taken out by the owner only covers their exposure to risk, meaning the possessions of the tenants won't be covered.
Construction and renovation jobs are not covered by homeowners insurance. If something does happen while building or fixing up a residence, you'll need to pursue your claim through the contractor's insurance. Should your own actions during a remodel cause damage to a house, you'll be in a self-insuring situation.