Homeowner Guide

Is Typical Homeowner’s Insurance Enough?

Is typical homeowner’s insurance enough? After the February winter weather, not to mention the 2021 ice storm and frequent Texas thunderstorms, this is a pressing question for homeowners.

Lenders require homeowner’s insurance policies as part of homeownership, but typical policies may not cover everything you desire. Insurance providers generally do not cover problems originating from poor maintenance, for example. Here is an outline of what you can expect a typical homeowner’s insurance policy to cover and not cover:

Typically Covered

  • Structural Damage: Most policies cover damage to the structure of the home. A provider’s definition of damage often includes fires, tornadoes, windstorms, and incidents such as trees falling on the house.
  • Personal Belongings: Also known as “contents coverage” or “personal property coverage,” this protects the belongings inside the home up to a certain dollar limit, such as $30,000. Contents coverage helps replace property lost due to theft or as part of structural damage claims.
  • Personal Liability: This type of coverage financially protects you when others injure themselves on your property. For example, if a visitor falls down your stairs and deems you liable.
  • Alternative Living Arrangements: If the damage renders the home unlivable, a typical policy may pay for hotel stays or rentals while work is done.

Not Typically Covered

  • Poor Maintenance: Insurance providers will not pay for damage caused by poor maintenance, or “wear and tear.” The reason for the damage is important to the provider. Storm-related damage will generally receive coverage. Damage due to age or neglect will not.
  • Floods and Earthquakes: These natural disasters are not automatically covered, although high-risk area insurers may require their purchase on top of the typical policy.
  • Jewelry and Collectibles: Baseline theft coverage caps how much the provider will pay. Insurance providers offer special policies to protect more expensive jewelry, heirlooms, and collectibles.
  • Identity Theft Protection: As already discussed, insurers generally cover theft damages. However, theft can cause damage far beyond property loss. Stolen mail or sensitive documents could create identity theft concerns, which insurance providers do not cover.

Please speak with your insurance provider regarding the specifics of your homeowner’s insurance policy.

Considering homeowner’s insurance as part of the monthly payment on a potential new home? Talk with us at First Bank or get pre-qualified today to figure out how much you can afford.

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