Check out my previous post which discuss homeowners insurance coverage A-C.
Coverage D: Displacement from Home
If you are displaced from your home due to a covered loss (such as a fire), this coverage will reimburse your hotel stay, restaurant, and other living expenses you may incur while displaced from your home. The amount of this coverage varies.
Coverage E: Personal Liability
This type of coverage protects you and your covered family members against lawsuits. Lawsuits are more common than you may think. For example, if you have a dog and it maliciously bites your neighbor – they could sue you. If they sue and you do not know you have this type of coverage you may end up selling the house in order to pay to settle the case. Ok, I am being extreme here, but I am trying to get this point across to you - read your policy!
Also, it is recommended by professionals to take out additional personal liability coverage if you have a swimming pool on your property as it is considered a hazard. Little kiddos are attracted to pretty swimming pools - accidents happen all the time.
Coverage F: Medical Expense
This type of coverage is vital if someone is injured on your property. This type of coverage will pay for the person’s medical expenses, up to your policy limit, if the injured person does not want to sue.
Be aware that your deductible must be satisfied first before your insurance coverage will kick in. For the example I gave in part 1 (your iPad was stolen), yes it may be covered, but you will probably not want to make a claim on this incident if your deductible is $1,000 as the cost of an iPad is typically $600.
Speaking of deductible - just in case you are looking at this word with a perplexed look on your face, a deductible is the amount you have agreed to pay the insurance company before they will hold up their end of the bargain, i.e. your insurance coverage. Usually, the higher your deductible the lower your premium. If you have a $500 deductible for your homeowners insurance, you should consider increasing it to $1,000. This gesture may lower your premium substantially. You will never know unless you ask!
This also circles back to the emergency fund! – click and read EMERGENCY FUND POST - It brings me joy when personal finance intertwines with everything. $1,000 may sound like a lot of money to give to your insurance company BUT if you are properly prepared this will be one less stressor in a crisis.
If you acquire new property that is fairly expensive you may want to update your homeowners’ policy. Also, try to make it a habit of updating your home inventory checklist (covered in part 1) at least once a year.
Make sure you check out the previous post – Homeowners Insurance Unveiled Part 1.
I hope this post is helpful!