Another important policy to consider is a homeowner’s insurance policy. If you have a lien against your home, then you are required to have it insured. It only makes sense to have your home insured, because your home and belongings are the most important and valuable assets you own. A homeowner’s policy is designed to protect homeowners, but of course there is usually a deductible to meet before you file a claim. The larger the deductible, the less expensive your homeowners policy may be.

A typical homeowner’s insurance policy is divided into two parts: Property Protection and Liability Protection. Property is usually listed on the declarations page. Property Protection is normally broken down into four additional sections: dwelling, other structures, personal property and loss of use.

The Dwelling section covers your house, attached structures, plumbing, heating, and electrical. Other structures covers detached structures, such as garages, storage sheds, fences, driveways, sidewalks and patios. Personal Property covers personal property, including the contents of your home and other personal items. Loss of Use covers living expenses, if you can not live in your home while it is being repaired.

Then there is the Liability Coverage’s section. This section is broken down into two parts, personal liability and medical payments. The Personal Liability section provides personal liability coverage against a claim or lawsuit resulting from bodily injury, or property damages to others that was caused by an accident on your property. The medical payments section includes coverage to pay medical expenses for people accidentally injured on your property.

As you are becoming more familiar with the structure of an insurance policy, we can not forget about the exclusions section. Most policies do not cover injuries to animals, damage to motor vehicles or aircraft. Nor do they normally cover losses due to floods, mudslides, water damage from sewer backups, war or nuclear hazard, neglect, earthquakes, or power failures. To cover these exclusions, it will cost you extra.

Congratulations, in taking the first important step towards protecting yourself or your property by purchasing an insurance policy. It makes sense to learn how to read and understand it. By doing so, you have gained the knowledge you need to ask the right questions when seeking advice from your insurance agent and potentially saving yourself a great deal of stress or heartache in the event you need to make a claim.

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