Budget Concerns: How Much Insurance is Enough?

Understanding Property Coverage Under Your Homeowners Insurance Policy

20 November 2015

Dustin Duncan

As a homeowner, having homeowners insurance is a must since it will protect you financially if damages were to occur to your home. In order to be sure that you are adequately protected, you will want to know how homeowners insurance works and what is covered. The amount of property coverage that you receive from basic homeowners insurance coverage is broken down into these four sections:

1. Dwelling Coverage: Dwelling coverage covers your house and attached structures including plumbing, electrical wiring, plumbing, built-in appliances heating, and permanent air conditioning. If any of these things were to become damaged due to fire, flooding, and more, you would receive coverage for it under your homeowners insurance policy. 
2. Other Structures: Other structures is coverage for any detached structures, which include garages, outdoor storage, fencing, driveways, and patio. You will receive coverage to help replace these detached structures if damage were to occur. 
3. Personal Property: Homeowners insurance will also cover personal property that you and your family have. This coverage is enough to provide coverage for the full cash value or replacement cost. This type of coverage is often limited, so you may want to consider additional coverage if you feel that you need it. Without additional coverage, you will receive very limited coverage for things, such as a boat that you own, firearms, jewelry, and electronic devices. 
4. Loss of Use: If your home is currently unlivable because of repairs that are being made, your homeowners insurance coverage will cover more than what your normal living expenses are. This can help you and your family stay in a hotel or rental while repairs are being made. 

Remember that all the above coverages will only be covered once your deductible is paid. When you know what coverage you receive with basic homeowners insurance, you can determine what type of additional coverages you may need. Additional Coverages can include:

Credit Card Forgery: Credit card forgery protection would provide you with coverage if your credit cards were to be stolen and used against you. This type of coverage does not include a deducible. This can be helpful if you have a number of credit cards with a very high credit limit. 

Inflation Guard: Inflation guard protection is helpful because if you were to lose your home completely, your insurance coverage would be high enough to cover the cost of full replacement. Whenever your home increases in value, the amount of insurance protection that you will receive will increase, as well. 

Theft Protection: If anything were to be stolen from your home or even from your vehicle, you will receive coverage with this additional insurance coverage even if you cannot prove that there was forced entry. 

By understanding how homeowners insurance works, you can better determine what will work best for you. If you have questions, consider contacting local insurance companies, such as Ronald H. Krupa Insurance Agency, to discuss your options and concerns.

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